Correlation Between Byggmax Group and AB Electrolux
Can any of the company-specific risk be diversified away by investing in both Byggmax Group and AB Electrolux 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 AB Electrolux 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 AB Electrolux, you can compare the effects of market volatilities on Byggmax Group and AB Electrolux 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 AB Electrolux. Check out your portfolio center. Please also check ongoing floating volatility patterns of Byggmax Group and AB Electrolux.
Diversification Opportunities for Byggmax Group and AB Electrolux
-0.66 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Byggmax and ELUX-B is -0.66. Overlapping area represents the amount of risk that can be diversified away by holding Byggmax Group AB and AB Electrolux in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AB Electrolux 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 AB Electrolux. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AB Electrolux has no effect on the direction of Byggmax Group i.e., Byggmax Group and AB Electrolux go up and down completely randomly.
Pair Corralation between Byggmax Group and AB Electrolux
Assuming the 90 days trading horizon Byggmax Group AB is expected to generate 1.33 times more return on investment than AB Electrolux. However, Byggmax Group is 1.33 times more volatile than AB Electrolux. It trades about -0.13 of its potential returns per unit of risk. AB Electrolux is currently generating about -0.25 per unit of risk. If you would invest 4,634 in Byggmax Group AB on August 29, 2024 and sell it today you would lose (386.00) from holding Byggmax Group AB or give up 8.33% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Byggmax Group AB vs. AB Electrolux
Performance |
| Timeline |
| Byggmax Group AB |
| AB Electrolux |
Byggmax Group and AB Electrolux Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Byggmax Group and AB Electrolux
The main advantage of trading using opposite Byggmax Group and AB Electrolux positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Byggmax Group position performs unexpectedly, AB Electrolux 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 AB Electrolux will offset losses from the drop in AB Electrolux's long position.| Byggmax Group vs. New Wave Group | Byggmax Group vs. Clas Ohlson AB | Byggmax Group vs. BE Group AB | Byggmax Group vs. Betsson AB |
| AB Electrolux vs. Precise Biometrics AB | AB Electrolux vs. Anoto Group AB | AB Electrolux vs. Bong AB | AB Electrolux vs. Episurf Medical 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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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