Correlation Between Badger Infrastructure and Skanska AB
Can any of the company-specific risk be diversified away by investing in both Badger Infrastructure and Skanska AB 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 Badger Infrastructure and Skanska AB into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Badger Infrastructure Solutions and Skanska AB ser, you can compare the effects of market volatilities on Badger Infrastructure and Skanska AB 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 Badger Infrastructure with a short position of Skanska AB. Check out your portfolio center. Please also check ongoing floating volatility patterns of Badger Infrastructure and Skanska AB.
Diversification Opportunities for Badger Infrastructure and Skanska AB
0.31 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Badger and Skanska is 0.31. Overlapping area represents the amount of risk that can be diversified away by holding Badger Infrastructure Solution and Skanska AB ser in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Skanska AB ser and Badger Infrastructure 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 Badger Infrastructure Solutions are associated (or correlated) with Skanska AB. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Skanska AB ser has no effect on the direction of Badger Infrastructure i.e., Badger Infrastructure and Skanska AB go up and down completely randomly.
Pair Corralation between Badger Infrastructure and Skanska AB
Assuming the 90 days horizon Badger Infrastructure Solutions is expected to under-perform the Skanska AB. In addition to that, Badger Infrastructure is 1.56 times more volatile than Skanska AB ser. It trades about -0.03 of its total potential returns per unit of risk. Skanska AB ser is currently generating about 0.07 per unit of volatility. If you would invest 1,798 in Skanska AB ser on August 25, 2024 and sell it today you would earn a total of 197.00 from holding Skanska AB ser or generate 10.96% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 97.62% |
| Values | Daily Returns |
Badger Infrastructure Solution vs. Skanska AB ser
Performance |
| Timeline |
| Badger Infrastructure |
| Skanska AB ser |
Badger Infrastructure and Skanska AB Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Badger Infrastructure and Skanska AB
The main advantage of trading using opposite Badger Infrastructure and Skanska AB positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Badger Infrastructure position performs unexpectedly, Skanska AB 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 Skanska AB will offset losses from the drop in Skanska AB's long position.| Badger Infrastructure vs. Element Solutions | Badger Infrastructure vs. Orion Engineered Carbons | Badger Infrastructure vs. Minerals Technologies | Badger Infrastructure vs. Ingevity Corp |
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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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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