Correlation Between Arctic Gold and BillerudKorsnas
Can any of the company-specific risk be diversified away by investing in both Arctic Gold and BillerudKorsnas at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Arctic Gold and BillerudKorsnas into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Arctic Gold Publ and BillerudKorsnas AB, you can compare the effects of market volatilities on Arctic Gold and BillerudKorsnas and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Arctic Gold with a short position of BillerudKorsnas. Check out your portfolio center. Please also check ongoing floating volatility patterns of Arctic Gold and BillerudKorsnas.
Diversification Opportunities for Arctic Gold and BillerudKorsnas
0.19 | Correlation Coefficient |
Average diversification
The 3 months correlation between Arctic and BillerudKorsnas is 0.19. Overlapping area represents the amount of risk that can be diversified away by holding Arctic Gold Publ and BillerudKorsnas AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BillerudKorsnas AB and Arctic Gold is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Arctic Gold Publ are associated (or correlated) with BillerudKorsnas. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BillerudKorsnas AB has no effect on the direction of Arctic Gold i.e., Arctic Gold and BillerudKorsnas go up and down completely randomly.
Pair Corralation between Arctic Gold and BillerudKorsnas
Assuming the 90 days trading horizon Arctic Gold Publ is expected to under-perform the BillerudKorsnas. In addition to that, Arctic Gold is 4.92 times more volatile than BillerudKorsnas AB. It trades about -0.06 of its total potential returns per unit of risk. BillerudKorsnas AB is currently generating about -0.04 per unit of volatility. If you would invest 10,010 in BillerudKorsnas AB on September 12, 2024 and sell it today you would lose (165.00) from holding BillerudKorsnas AB or give up 1.65% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Arctic Gold Publ vs. BillerudKorsnas AB
Performance |
| Timeline |
| Arctic Gold Publ |
| BillerudKorsnas AB |
Arctic Gold and BillerudKorsnas Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Arctic Gold and BillerudKorsnas
The main advantage of trading using opposite Arctic Gold and BillerudKorsnas positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Arctic Gold position performs unexpectedly, BillerudKorsnas can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in BillerudKorsnas will offset losses from the drop in BillerudKorsnas' long position.| Arctic Gold vs. BillerudKorsnas AB | Arctic Gold vs. SSAB AB | Arctic Gold vs. Svenska Cellulosa Aktiebolaget | Arctic Gold vs. Axfood AB |
| BillerudKorsnas vs. SSAB AB | BillerudKorsnas vs. Svenska Cellulosa Aktiebolaget | BillerudKorsnas vs. Axfood AB | BillerudKorsnas vs. Proact IT Group |
Check out your portfolio center.Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.
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