Correlation Between Beijer Ref and Biotage AB
Can any of the company-specific risk be diversified away by investing in both Beijer Ref and Biotage 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 Beijer Ref and Biotage AB into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Beijer Ref AB and Biotage AB, you can compare the effects of market volatilities on Beijer Ref and Biotage 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 Beijer Ref with a short position of Biotage AB. Check out your portfolio center. Please also check ongoing floating volatility patterns of Beijer Ref and Biotage AB.
Diversification Opportunities for Beijer Ref and Biotage AB
0.47 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Beijer and Biotage is 0.47. Overlapping area represents the amount of risk that can be diversified away by holding Beijer Ref AB and Biotage AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Biotage AB and Beijer Ref 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 Beijer Ref AB are associated (or correlated) with Biotage AB. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Biotage AB has no effect on the direction of Beijer Ref i.e., Beijer Ref and Biotage AB go up and down completely randomly.
Pair Corralation between Beijer Ref and Biotage AB
Assuming the 90 days trading horizon Beijer Ref AB is expected to generate 0.93 times more return on investment than Biotage AB. However, Beijer Ref AB is 1.08 times less risky than Biotage AB. It trades about -0.02 of its potential returns per unit of risk. Biotage AB is currently generating about -0.15 per unit of risk. If you would invest 16,699 in Beijer Ref AB on August 25, 2024 and sell it today you would lose (389.00) from holding Beijer Ref AB or give up 2.33% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Beijer Ref AB vs. Biotage AB
Performance |
| Timeline |
| Beijer Ref AB |
| Biotage AB |
Beijer Ref and Biotage AB Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Beijer Ref and Biotage AB
The main advantage of trading using opposite Beijer Ref and Biotage AB positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Beijer Ref position performs unexpectedly, Biotage 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 Biotage AB will offset losses from the drop in Biotage AB's long position.| Beijer Ref vs. Addtech AB | Beijer Ref vs. Indutrade AB | Beijer Ref vs. Lifco AB | Beijer Ref vs. NIBE Industrier 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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
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