Correlation Between Byggmax Group and BHG Group
Can any of the company-specific risk be diversified away by investing in both Byggmax Group and BHG Group 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 Byggmax Group and BHG Group into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Byggmax Group AB and BHG Group AB, you can compare the effects of market volatilities on Byggmax Group and BHG Group 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 Byggmax Group with a short position of BHG Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of Byggmax Group and BHG Group.
Diversification Opportunities for Byggmax Group and BHG Group
0.74 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Byggmax and BHG is 0.74. Overlapping area represents the amount of risk that can be diversified away by holding Byggmax Group AB and BHG Group AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BHG Group AB and Byggmax Group 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 Byggmax Group AB are associated (or correlated) with BHG Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BHG Group AB has no effect on the direction of Byggmax Group i.e., Byggmax Group and BHG Group go up and down completely randomly.
Pair Corralation between Byggmax Group and BHG Group
Assuming the 90 days trading horizon Byggmax Group is expected to generate 1.59 times less return on investment than BHG Group. But when comparing it to its historical volatility, Byggmax Group AB is 1.74 times less risky than BHG Group. It trades about 0.08 of its potential returns per unit of risk. BHG Group AB is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest 1,558 in BHG Group AB on November 3, 2024 and sell it today you would earn a total of 1,152 from holding BHG Group AB or generate 73.94% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Byggmax Group AB vs. BHG Group AB
Performance |
| Timeline |
| Byggmax Group AB |
| BHG Group AB |
Byggmax Group and BHG Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Byggmax Group and BHG Group
The main advantage of trading using opposite Byggmax Group and BHG Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Byggmax Group position performs unexpectedly, BHG Group 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 BHG Group will offset losses from the drop in BHG Group's long position.| Byggmax Group vs. Clas Ohlson AB | Byggmax Group vs. Inwido AB | Byggmax Group vs. Cloetta AB | Byggmax Group vs. Betsson AB |
| BHG Group vs. Sinch AB | BHG Group vs. Byggmax Group AB | BHG Group vs. Stillfront Group AB | BHG Group vs. Boozt 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 Bonds Directory module to find actively traded corporate debentures issued by US companies.
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