Correlation Between Beijer Ref and Trelleborg
Can any of the company-specific risk be diversified away by investing in both Beijer Ref and Trelleborg 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 Trelleborg 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 Trelleborg AB, you can compare the effects of market volatilities on Beijer Ref and Trelleborg 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 Trelleborg. Check out your portfolio center. Please also check ongoing floating volatility patterns of Beijer Ref and Trelleborg.
Diversification Opportunities for Beijer Ref and Trelleborg
0.51 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Beijer and Trelleborg is 0.51. Overlapping area represents the amount of risk that can be diversified away by holding Beijer Ref AB and Trelleborg AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Trelleborg 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 Trelleborg. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Trelleborg AB has no effect on the direction of Beijer Ref i.e., Beijer Ref and Trelleborg go up and down completely randomly.
Pair Corralation between Beijer Ref and Trelleborg
Assuming the 90 days trading horizon Beijer Ref AB is expected to generate 1.67 times more return on investment than Trelleborg. However, Beijer Ref is 1.67 times more volatile than Trelleborg AB. It trades about 0.08 of its potential returns per unit of risk. Trelleborg AB is currently generating about 0.07 per unit of risk. If you would invest 11,149 in Beijer Ref AB on September 1, 2024 and sell it today you would earn a total of 6,051 from holding Beijer Ref AB or generate 54.27% 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. Trelleborg AB
Performance |
| Timeline |
| Beijer Ref AB |
| Trelleborg AB |
Beijer Ref and Trelleborg Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Beijer Ref and Trelleborg
The main advantage of trading using opposite Beijer Ref and Trelleborg positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Beijer Ref position performs unexpectedly, Trelleborg 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 Trelleborg will offset losses from the drop in Trelleborg's long position.| Beijer Ref vs. Addtech AB | Beijer Ref vs. Indutrade AB | Beijer Ref vs. Lifco AB | Beijer Ref vs. NIBE Industrier AB |
| Trelleborg vs. AB SKF | Trelleborg vs. Sandvik AB | Trelleborg vs. Alfa Laval AB | Trelleborg vs. Husqvarna 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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.
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