Correlation Between BHG Group and Rugvista Group
Can any of the company-specific risk be diversified away by investing in both BHG Group and Rugvista Group 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 BHG Group and Rugvista Group into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between BHG Group AB and Rugvista Group AB, you can compare the effects of market volatilities on BHG Group and Rugvista Group 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 BHG Group with a short position of Rugvista Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of BHG Group and Rugvista Group.
Diversification Opportunities for BHG Group and Rugvista Group
0.84 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between BHG and Rugvista is 0.84. Overlapping area represents the amount of risk that can be diversified away by holding BHG Group AB and Rugvista Group AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Rugvista Group AB and BHG Group 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 BHG Group AB are associated (or correlated) with Rugvista Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Rugvista Group AB has no effect on the direction of BHG Group i.e., BHG Group and Rugvista Group go up and down completely randomly.
Pair Corralation between BHG Group and Rugvista Group
Assuming the 90 days trading horizon BHG Group AB is expected to generate 2.33 times more return on investment than Rugvista Group. However, BHG Group is 2.33 times more volatile than Rugvista Group AB. It trades about 0.19 of its potential returns per unit of risk. Rugvista Group AB is currently generating about 0.16 per unit of risk. If you would invest 2,082 in BHG Group AB on November 27, 2024 and sell it today you would earn a total of 430.00 from holding BHG Group AB or generate 20.65% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
BHG Group AB vs. Rugvista Group AB
Performance |
| Timeline |
| BHG Group AB |
| Rugvista Group AB |
BHG Group and Rugvista Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BHG Group and Rugvista Group
The main advantage of trading using opposite BHG Group and Rugvista Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BHG Group position performs unexpectedly, Rugvista Group 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 Rugvista Group will offset losses from the drop in Rugvista Group's long position.| BHG Group vs. Sinch AB | BHG Group vs. Byggmax Group AB | BHG Group vs. Stillfront Group AB | BHG Group vs. Boozt AB |
| Rugvista Group vs. Cint Group AB | Rugvista Group vs. Desenio Group AB | Rugvista Group vs. Fractal Gaming Group | Rugvista Group vs. Pierce Group 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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..
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