Correlation Between BE Group and Softronic
Can any of the company-specific risk be diversified away by investing in both BE Group and Softronic 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 Softronic 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 Softronic AB, you can compare the effects of market volatilities on BE Group and Softronic 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 Softronic. Check out your portfolio center. Please also check ongoing floating volatility patterns of BE Group and Softronic.
Diversification Opportunities for BE Group and Softronic
Excellent diversification
The 3 months correlation between BEGR and Softronic is -0.67. Overlapping area represents the amount of risk that can be diversified away by holding BE Group AB and Softronic AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Softronic 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 Softronic. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Softronic AB has no effect on the direction of BE Group i.e., BE Group and Softronic go up and down completely randomly.
Pair Corralation between BE Group and Softronic
Assuming the 90 days trading horizon BE Group AB is expected to under-perform the Softronic. In addition to that, BE Group is 1.37 times more volatile than Softronic AB. It trades about -0.02 of its total potential returns per unit of risk. Softronic AB is currently generating about 0.03 per unit of volatility. If you would invest 2,012 in Softronic AB on September 3, 2024 and sell it today you would earn a total of 423.00 from holding Softronic AB or generate 21.02% 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. Softronic AB
Performance |
| Timeline |
| BE Group AB |
| Softronic AB |
BE Group and Softronic Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BE Group and Softronic
The main advantage of trading using opposite BE Group and Softronic positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BE Group position performs unexpectedly, Softronic 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 Softronic will offset losses from the drop in Softronic'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 |
| Softronic vs. Svenska Aerogel Holding | Softronic vs. Acarix AS | Softronic vs. Clean Motion AB | Softronic vs. AroCell 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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.
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