Correlation Between Beijer Ref and Vitec Software
Can any of the company-specific risk be diversified away by investing in both Beijer Ref and Vitec Software 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 Vitec Software 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 Vitec Software Group, you can compare the effects of market volatilities on Beijer Ref and Vitec Software 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 Vitec Software. Check out your portfolio center. Please also check ongoing floating volatility patterns of Beijer Ref and Vitec Software.
Diversification Opportunities for Beijer Ref and Vitec Software
0.42 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Beijer and Vitec is 0.42. Overlapping area represents the amount of risk that can be diversified away by holding Beijer Ref AB and Vitec Software Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Vitec Software Group 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 Vitec Software. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Vitec Software Group has no effect on the direction of Beijer Ref i.e., Beijer Ref and Vitec Software go up and down completely randomly.
Pair Corralation between Beijer Ref and Vitec Software
Assuming the 90 days trading horizon Beijer Ref AB is expected to generate 0.87 times more return on investment than Vitec Software. However, Beijer Ref AB is 1.15 times less risky than Vitec Software. It trades about -0.02 of its potential returns per unit of risk. Vitec Software Group is currently generating about -0.08 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. Vitec Software Group
Performance |
| Timeline |
| Beijer Ref AB |
| Vitec Software Group |
Beijer Ref and Vitec Software Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Beijer Ref and Vitec Software
The main advantage of trading using opposite Beijer Ref and Vitec Software positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Beijer Ref position performs unexpectedly, Vitec Software 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 Vitec Software will offset losses from the drop in Vitec Software's long position.| Beijer Ref vs. Addtech AB | Beijer Ref vs. Indutrade AB | Beijer Ref vs. Lifco AB | Beijer Ref vs. NIBE Industrier AB |
| Vitec Software vs. Lifco AB | Vitec Software vs. Lagercrantz Group AB | Vitec Software vs. Addtech AB | Vitec Software vs. Instalco Intressenter 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 Portfolio Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.
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