Correlation Between Balco Group and Jetpak Top
Can any of the company-specific risk be diversified away by investing in both Balco Group and Jetpak Top 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 Balco Group and Jetpak Top into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Balco Group AB and Jetpak Top Holding, you can compare the effects of market volatilities on Balco Group and Jetpak Top 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 Balco Group with a short position of Jetpak Top. Check out your portfolio center. Please also check ongoing floating volatility patterns of Balco Group and Jetpak Top.
Diversification Opportunities for Balco Group and Jetpak Top
0.43 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Balco and Jetpak is 0.43. Overlapping area represents the amount of risk that can be diversified away by holding Balco Group AB and Jetpak Top Holding in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Jetpak Top Holding and Balco Group 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 Balco Group AB are associated (or correlated) with Jetpak Top. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Jetpak Top Holding has no effect on the direction of Balco Group i.e., Balco Group and Jetpak Top go up and down completely randomly.
Pair Corralation between Balco Group and Jetpak Top
Assuming the 90 days trading horizon Balco Group is expected to generate 11.86 times less return on investment than Jetpak Top. But when comparing it to its historical volatility, Balco Group AB is 1.17 times less risky than Jetpak Top. It trades about 0.0 of its potential returns per unit of risk. Jetpak Top Holding is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest 10,050 in Jetpak Top Holding on September 3, 2024 and sell it today you would earn a total of 350.00 from holding Jetpak Top Holding or generate 3.48% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Balco Group AB vs. Jetpak Top Holding
Performance |
| Timeline |
| Balco Group AB |
| Jetpak Top Holding |
Balco Group and Jetpak Top Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Balco Group and Jetpak Top
The main advantage of trading using opposite Balco Group and Jetpak Top positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Balco Group position performs unexpectedly, Jetpak Top 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 Jetpak Top will offset losses from the drop in Jetpak Top's long position.| Balco Group vs. Inwido AB | Balco Group vs. Nordic Waterproofing Holding | Balco Group vs. Alimak Hek Group | Balco Group vs. Ferronordic AB |
| Jetpak Top vs. Alimak Hek Group | Jetpak Top vs. Balco Group AB | Jetpak Top vs. Bulten AB | Jetpak Top vs. Rejlers AB |
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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.
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