Correlation Between Bergman Beving and Linc AB
Can any of the company-specific risk be diversified away by investing in both Bergman Beving and Linc 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 Bergman Beving and Linc AB into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Bergman Beving AB and Linc AB, you can compare the effects of market volatilities on Bergman Beving and Linc 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 Bergman Beving with a short position of Linc AB. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bergman Beving and Linc AB.
Diversification Opportunities for Bergman Beving and Linc AB
0.25 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Bergman and Linc is 0.25. Overlapping area represents the amount of risk that can be diversified away by holding Bergman Beving AB and Linc AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Linc AB and Bergman Beving 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 Bergman Beving AB are associated (or correlated) with Linc AB. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Linc AB has no effect on the direction of Bergman Beving i.e., Bergman Beving and Linc AB go up and down completely randomly.
Pair Corralation between Bergman Beving and Linc AB
Assuming the 90 days trading horizon Bergman Beving AB is expected to generate 1.3 times more return on investment than Linc AB. However, Bergman Beving is 1.3 times more volatile than Linc AB. It trades about -0.07 of its potential returns per unit of risk. Linc AB is currently generating about -0.15 per unit of risk. If you would invest 29,550 in Bergman Beving AB on September 4, 2024 and sell it today you would lose (1,050) from holding Bergman Beving AB or give up 3.55% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Bergman Beving AB vs. Linc AB
Performance |
| Timeline |
| Bergman Beving AB |
| Linc AB |
Bergman Beving and Linc AB Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bergman Beving and Linc AB
The main advantage of trading using opposite Bergman Beving and Linc AB positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bergman Beving position performs unexpectedly, Linc 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 Linc AB will offset losses from the drop in Linc AB's long position.| Bergman Beving vs. Lagercrantz Group AB | Bergman Beving vs. Addtech AB | Bergman Beving vs. AddLife AB | Bergman Beving vs. Bufab Holding AB |
| Linc AB vs. L E Lundbergfretagen | Linc AB vs. Industrivarden AB ser | Linc AB vs. Svenska Handelsbanken AB | Linc AB vs. Investor AB ser |
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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.
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