Correlation Between Beijer Ref and Indutrade
Can any of the company-specific risk be diversified away by investing in both Beijer Ref and Indutrade 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 Indutrade 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 Indutrade AB, you can compare the effects of market volatilities on Beijer Ref and Indutrade 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 Indutrade. Check out your portfolio center. Please also check ongoing floating volatility patterns of Beijer Ref and Indutrade.
Diversification Opportunities for Beijer Ref and Indutrade
0.47 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Beijer and Indutrade is 0.47. Overlapping area represents the amount of risk that can be diversified away by holding Beijer Ref AB and Indutrade AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Indutrade 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 Indutrade. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Indutrade AB has no effect on the direction of Beijer Ref i.e., Beijer Ref and Indutrade go up and down completely randomly.
Pair Corralation between Beijer Ref and Indutrade
Assuming the 90 days trading horizon Beijer Ref AB is expected to generate 1.69 times more return on investment than Indutrade. However, Beijer Ref is 1.69 times more volatile than Indutrade AB. It trades about 0.02 of its potential returns per unit of risk. Indutrade AB is currently generating about -0.26 per unit of risk. If you would invest 16,190 in Beijer Ref AB on August 28, 2024 and sell it today you would earn a total of 55.00 from holding Beijer Ref AB or generate 0.34% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Beijer Ref AB vs. Indutrade AB
Performance |
| Timeline |
| Beijer Ref AB |
| Indutrade AB |
Beijer Ref and Indutrade Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Beijer Ref and Indutrade
The main advantage of trading using opposite Beijer Ref and Indutrade positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Beijer Ref position performs unexpectedly, Indutrade 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 Indutrade will offset losses from the drop in Indutrade's long position.| Beijer Ref vs. Lagercrantz Group AB | Beijer Ref vs. Addtech AB | Beijer Ref vs. AddLife AB | Beijer Ref vs. Bufab Holding AB |
| Indutrade vs. Lifco AB | Indutrade vs. Addtech AB | Indutrade vs. NIBE Industrier AB | Indutrade vs. Investment AB Latour |
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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.
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