Correlation Between Birkenstock Holding and SEB SA
Can any of the company-specific risk be diversified away by investing in both Birkenstock Holding and SEB SA 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 Birkenstock Holding and SEB SA into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Birkenstock Holding plc and SEB SA, you can compare the effects of market volatilities on Birkenstock Holding and SEB SA 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 Birkenstock Holding with a short position of SEB SA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Birkenstock Holding and SEB SA.
Diversification Opportunities for Birkenstock Holding and SEB SA
0.42 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Birkenstock and SEB is 0.42. Overlapping area represents the amount of risk that can be diversified away by holding Birkenstock Holding plc and SEB SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SEB SA and Birkenstock Holding 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 Birkenstock Holding plc are associated (or correlated) with SEB SA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SEB SA has no effect on the direction of Birkenstock Holding i.e., Birkenstock Holding and SEB SA go up and down completely randomly.
Pair Corralation between Birkenstock Holding and SEB SA
Given the investment horizon of 90 days Birkenstock Holding plc is expected to under-perform the SEB SA. But the stock apears to be less risky and, when comparing its historical volatility, Birkenstock Holding plc is 1.26 times less risky than SEB SA. The stock trades about -0.52 of its potential returns per unit of risk. The SEB SA is currently generating about -0.05 of returns per unit of risk over similar time horizon. If you would invest 960.00 in SEB SA on December 9, 2024 and sell it today you would lose (26.00) from holding SEB SA or give up 2.71% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Birkenstock Holding plc vs. SEB SA
Performance |
| Timeline |
| Birkenstock Holding plc |
| SEB SA |
Birkenstock Holding and SEB SA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Birkenstock Holding and SEB SA
The main advantage of trading using opposite Birkenstock Holding and SEB SA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Birkenstock Holding position performs unexpectedly, SEB SA 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 SEB SA will offset losses from the drop in SEB SA's long position.| Birkenstock Holding vs. Verra Mobility Corp | ||
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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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
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