Correlation Between Bilia AB and Clas Ohlson
Can any of the company-specific risk be diversified away by investing in both Bilia AB and Clas Ohlson 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 Bilia AB and Clas Ohlson into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Bilia AB and Clas Ohlson AB, you can compare the effects of market volatilities on Bilia AB and Clas Ohlson 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 Bilia AB with a short position of Clas Ohlson. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bilia AB and Clas Ohlson.
Diversification Opportunities for Bilia AB and Clas Ohlson
0.57 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Bilia and Clas is 0.57. Overlapping area represents the amount of risk that can be diversified away by holding Bilia AB and Clas Ohlson AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Clas Ohlson AB and Bilia AB 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 Bilia AB are associated (or correlated) with Clas Ohlson. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Clas Ohlson AB has no effect on the direction of Bilia AB i.e., Bilia AB and Clas Ohlson go up and down completely randomly.
Pair Corralation between Bilia AB and Clas Ohlson
Assuming the 90 days trading horizon Bilia AB is expected to generate 34.68 times less return on investment than Clas Ohlson. But when comparing it to its historical volatility, Bilia AB is 1.53 times less risky than Clas Ohlson. It trades about 0.0 of its potential returns per unit of risk. Clas Ohlson AB is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 16,266 in Clas Ohlson AB on September 1, 2024 and sell it today you would earn a total of 3,434 from holding Clas Ohlson AB or generate 21.11% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Bilia AB vs. Clas Ohlson AB
Performance |
| Timeline |
| Bilia AB |
| Clas Ohlson AB |
Bilia AB and Clas Ohlson Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bilia AB and Clas Ohlson
The main advantage of trading using opposite Bilia AB and Clas Ohlson positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bilia AB position performs unexpectedly, Clas Ohlson 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 Clas Ohlson will offset losses from the drop in Clas Ohlson's long position.The idea behind Bilia AB and Clas Ohlson AB pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| Clas Ohlson vs. Tele2 AB | Clas Ohlson vs. Axfood AB | Clas Ohlson vs. Telia Company AB | Clas Ohlson vs. Byggmax 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 Transaction History module to view history of all your transactions and understand their impact on performance.
Other Complementary Tools
| Pair Correlation Compare performance and examine fundamental relationship between any two equity instruments | |
| Technical Analysis Check basic technical indicators and analysis based on most latest market data | |
| Theme Ratings Determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Fundamentals Comparison Compare fundamentals across multiple equities to find investing opportunities | |
| Content Syndication Quickly integrate customizable finance content to your own investment portal |