Correlation Between BillerudKorsnas and Husqvarna
Can any of the company-specific risk be diversified away by investing in both BillerudKorsnas and Husqvarna 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 BillerudKorsnas and Husqvarna into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between BillerudKorsnas AB and Husqvarna AB, you can compare the effects of market volatilities on BillerudKorsnas and Husqvarna 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 Husqvarna. Check out your portfolio center. Please also check ongoing floating volatility patterns of BillerudKorsnas and Husqvarna.
Diversification Opportunities for BillerudKorsnas and Husqvarna
0.1 | Correlation Coefficient |
Average diversification
The 3 months correlation between BillerudKorsnas and Husqvarna is 0.1. Overlapping area represents the amount of risk that can be diversified away by holding BillerudKorsnas AB and Husqvarna AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Husqvarna 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 Husqvarna. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Husqvarna AB has no effect on the direction of BillerudKorsnas i.e., BillerudKorsnas and Husqvarna go up and down completely randomly.
Pair Corralation between BillerudKorsnas and Husqvarna
Assuming the 90 days trading horizon BillerudKorsnas AB is expected to generate 1.56 times more return on investment than Husqvarna. However, BillerudKorsnas is 1.56 times more volatile than Husqvarna AB. It trades about -0.2 of its potential returns per unit of risk. Husqvarna AB is currently generating about -0.38 per unit of risk. If you would invest 11,060 in BillerudKorsnas AB on August 24, 2024 and sell it today you would lose (1,290) from holding BillerudKorsnas AB or give up 11.66% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
BillerudKorsnas AB vs. Husqvarna AB
Performance |
| Timeline |
| BillerudKorsnas AB |
| Husqvarna AB |
BillerudKorsnas and Husqvarna Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BillerudKorsnas and Husqvarna
The main advantage of trading using opposite BillerudKorsnas and Husqvarna positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BillerudKorsnas position performs unexpectedly, Husqvarna 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 Husqvarna will offset losses from the drop in Husqvarna's long position.| BillerudKorsnas vs. Svenska Aerogel Holding | BillerudKorsnas vs. Kancera AB | BillerudKorsnas vs. BIMobject AB | BillerudKorsnas vs. KABE Group AB |
| Husqvarna vs. AB Electrolux | Husqvarna vs. Stora Enso Oyj | Husqvarna vs. Industrivarden AB ser | Husqvarna vs. Holmen 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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