Correlation Between BE Group and Online Brands
Can any of the company-specific risk be diversified away by investing in both BE Group and Online Brands 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 Online Brands 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 Online Brands Nordic, you can compare the effects of market volatilities on BE Group and Online Brands 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 Online Brands. Check out your portfolio center. Please also check ongoing floating volatility patterns of BE Group and Online Brands.
Diversification Opportunities for BE Group and Online Brands
0.37 | Correlation Coefficient |
Weak diversification
The 3 months correlation between BEGR and Online is 0.37. Overlapping area represents the amount of risk that can be diversified away by holding BE Group AB and Online Brands Nordic in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Online Brands Nordic 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 Online Brands. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Online Brands Nordic has no effect on the direction of BE Group i.e., BE Group and Online Brands go up and down completely randomly.
Pair Corralation between BE Group and Online Brands
Assuming the 90 days trading horizon BE Group AB is expected to generate 0.59 times more return on investment than Online Brands. However, BE Group AB is 1.7 times less risky than Online Brands. It trades about -0.02 of its potential returns per unit of risk. Online Brands Nordic is currently generating about -0.02 per unit of risk. If you would invest 6,676 in BE Group AB on August 28, 2024 and sell it today you would lose (2,051) from holding BE Group AB or give up 30.72% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
BE Group AB vs. Online Brands Nordic
Performance |
| Timeline |
| BE Group AB |
| Online Brands Nordic |
BE Group and Online Brands Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BE Group and Online Brands
The main advantage of trading using opposite BE Group and Online Brands positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BE Group position performs unexpectedly, Online Brands 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 Online Brands will offset losses from the drop in Online Brands' long position.| BE Group vs. Addtech AB | BE Group vs. Teqnion AB | BE Group vs. Vitec Software Group | BE Group vs. Lagercrantz Group AB |
| Online Brands vs. New Wave Group | Online Brands vs. Clas Ohlson AB | Online Brands vs. BE Group AB | Online Brands vs. Betsson 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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.
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