Correlation Between BIMobject and Diadrom Holding
Can any of the company-specific risk be diversified away by investing in both BIMobject and Diadrom Holding 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 BIMobject and Diadrom Holding into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between BIMobject AB and Diadrom Holding AB, you can compare the effects of market volatilities on BIMobject and Diadrom Holding 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 BIMobject with a short position of Diadrom Holding. Check out your portfolio center. Please also check ongoing floating volatility patterns of BIMobject and Diadrom Holding.
Diversification Opportunities for BIMobject and Diadrom Holding
-0.36 | Correlation Coefficient |
Very good diversification
The 3 months correlation between BIMobject and Diadrom is -0.36. Overlapping area represents the amount of risk that can be diversified away by holding BIMobject AB and Diadrom Holding AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Diadrom Holding AB and BIMobject 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 BIMobject AB are associated (or correlated) with Diadrom Holding. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Diadrom Holding AB has no effect on the direction of BIMobject i.e., BIMobject and Diadrom Holding go up and down completely randomly.
Pair Corralation between BIMobject and Diadrom Holding
Assuming the 90 days trading horizon BIMobject AB is expected to generate 0.5 times more return on investment than Diadrom Holding. However, BIMobject AB is 1.98 times less risky than Diadrom Holding. It trades about 0.03 of its potential returns per unit of risk. Diadrom Holding AB is currently generating about -0.16 per unit of risk. If you would invest 450.00 in BIMobject AB on September 1, 2024 and sell it today you would earn a total of 3.00 from holding BIMobject AB or generate 0.67% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
BIMobject AB vs. Diadrom Holding AB
Performance |
| Timeline |
| BIMobject AB |
| Diadrom Holding AB |
BIMobject and Diadrom Holding Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BIMobject and Diadrom Holding
The main advantage of trading using opposite BIMobject and Diadrom Holding positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BIMobject position performs unexpectedly, Diadrom Holding 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 Diadrom Holding will offset losses from the drop in Diadrom Holding's long position.| BIMobject vs. G5 Entertainment publ | BIMobject vs. Catena Media plc | BIMobject vs. Crunchfish AB | BIMobject vs. FormPipe Software AB |
| Diadrom Holding vs. Enea AB | Diadrom Holding vs. Novotek AB | Diadrom Holding vs. Addnode Group AB | Diadrom Holding vs. Softronic 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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
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