Correlation Between BillerudKorsnas and Essity AB
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By analyzing existing cross correlation between BillerudKorsnas AB and Essity AB, you can compare the effects of market volatilities on BillerudKorsnas and Essity 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 BillerudKorsnas with a short position of Essity AB. Check out your portfolio center. Please also check ongoing floating volatility patterns of BillerudKorsnas and Essity AB.
Diversification Opportunities for BillerudKorsnas and Essity AB
0.53 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between BillerudKorsnas and Essity is 0.53. Overlapping area represents the amount of risk that can be diversified away by holding BillerudKorsnas AB and Essity AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Essity AB and BillerudKorsnas 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 BillerudKorsnas AB are associated (or correlated) with Essity AB. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Essity AB has no effect on the direction of BillerudKorsnas i.e., BillerudKorsnas and Essity AB go up and down completely randomly.
Pair Corralation between BillerudKorsnas and Essity AB
Assuming the 90 days trading horizon BillerudKorsnas AB is expected to under-perform the Essity AB. In addition to that, BillerudKorsnas is 1.9 times more volatile than Essity AB. It trades about 0.0 of its total potential returns per unit of risk. Essity AB is currently generating about 0.08 per unit of volatility. If you would invest 24,464 in Essity AB on September 1, 2024 and sell it today you would earn a total of 5,556 from holding Essity AB or generate 22.71% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
BillerudKorsnas AB vs. Essity AB
Performance |
| Timeline |
| BillerudKorsnas AB |
| Essity AB |
BillerudKorsnas and Essity AB Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BillerudKorsnas and Essity AB
The main advantage of trading using opposite BillerudKorsnas and Essity AB positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BillerudKorsnas position performs unexpectedly, Essity 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 Essity AB will offset losses from the drop in Essity AB's long position.| BillerudKorsnas vs. Holmen AB | BillerudKorsnas vs. Svenska Cellulosa Aktiebolaget | BillerudKorsnas vs. Husqvarna AB | BillerudKorsnas vs. Alfa Laval AB |
| Essity AB vs. Svenska Cellulosa Aktiebolaget | Essity AB vs. ASSA ABLOY AB | Essity AB vs. AB Electrolux | Essity AB vs. AB SKF |
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 Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.
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