Correlation Between BE Group and Clas Ohlson
Can any of the company-specific risk be diversified away by investing in both BE Group and Clas Ohlson 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 BE Group and Clas Ohlson into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between BE Group AB and Clas Ohlson AB, you can compare the effects of market volatilities on BE Group and Clas Ohlson 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 BE Group with a short position of Clas Ohlson. Check out your portfolio center. Please also check ongoing floating volatility patterns of BE Group and Clas Ohlson.
Diversification Opportunities for BE Group and Clas Ohlson
-0.7 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between BEGR and Clas is -0.7. Overlapping area represents the amount of risk that can be diversified away by holding BE Group AB and Clas Ohlson AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Clas Ohlson AB and BE 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 BE Group AB are associated (or correlated) with Clas Ohlson. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Clas Ohlson AB has no effect on the direction of BE Group i.e., BE Group and Clas Ohlson go up and down completely randomly.
Pair Corralation between BE Group and Clas Ohlson
Assuming the 90 days trading horizon BE Group AB is expected to under-perform the Clas Ohlson. But the stock apears to be less risky and, when comparing its historical volatility, BE Group AB is 1.17 times less risky than Clas Ohlson. The stock trades about -0.11 of its potential returns per unit of risk. The Clas Ohlson AB is currently generating about 0.12 of returns per unit of risk over similar time horizon. If you would invest 16,917 in Clas Ohlson AB on August 25, 2024 and sell it today you would earn a total of 2,243 from holding Clas Ohlson AB or generate 13.26% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
BE Group AB vs. Clas Ohlson AB
Performance |
| Timeline |
| BE Group AB |
| Clas Ohlson AB |
BE Group and Clas Ohlson Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BE Group and Clas Ohlson
The main advantage of trading using opposite BE Group and Clas Ohlson positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BE Group position performs unexpectedly, Clas Ohlson 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 Clas Ohlson will offset losses from the drop in Clas Ohlson's long position.| BE Group vs. Bjorn Borg AB | BE Group vs. BioInvent International AB | BE Group vs. Lindab International AB | BE Group vs. Clas Ohlson AB |
| Clas Ohlson vs. Tele2 AB | Clas Ohlson vs. Axfood AB | Clas Ohlson vs. Telia Company AB | Clas Ohlson vs. Byggmax Group 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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.
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