Correlation Between Bilia AB and Online Brands
Can any of the company-specific risk be diversified away by investing in both Bilia AB and Online Brands 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 Online Brands into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Bilia AB and Online Brands Nordic, you can compare the effects of market volatilities on Bilia AB and Online Brands 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 Online Brands. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bilia AB and Online Brands.
Diversification Opportunities for Bilia AB and Online Brands
-0.55 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Bilia and Online is -0.55. Overlapping area represents the amount of risk that can be diversified away by holding Bilia AB and Online Brands Nordic in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Online Brands Nordic 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 Online Brands. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Online Brands Nordic has no effect on the direction of Bilia AB i.e., Bilia AB and Online Brands go up and down completely randomly.
Pair Corralation between Bilia AB and Online Brands
Assuming the 90 days trading horizon Bilia AB is expected to generate 1.03 times less return on investment than Online Brands. But when comparing it to its historical volatility, Bilia AB is 2.97 times less risky than Online Brands. It trades about 0.06 of its potential returns per unit of risk. Online Brands Nordic is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest 1,395 in Online Brands Nordic on September 12, 2024 and sell it today you would lose (35.00) from holding Online Brands Nordic or give up 2.51% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Bilia AB vs. Online Brands Nordic
Performance |
| Timeline |
| Bilia AB |
| Online Brands Nordic |
Bilia AB and Online Brands Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bilia AB and Online Brands
The main advantage of trading using opposite Bilia AB and Online Brands positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bilia AB position performs unexpectedly, Online Brands 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 Online Brands will offset losses from the drop in Online Brands' long position.The idea behind Bilia AB and Online Brands Nordic 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.| Online Brands vs. Clas Ohlson AB | Online Brands vs. Bilia AB | Online Brands vs. Byggmax Group AB | Online Brands vs. Peab 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 Money Managers module to screen money managers from public funds and ETFs managed around the world.
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