Correlation Between Byggmax Group and Peab AB
Can any of the company-specific risk be diversified away by investing in both Byggmax Group and Peab AB 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 Peab AB 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 Peab AB, you can compare the effects of market volatilities on Byggmax Group and Peab AB 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 Peab AB. Check out your portfolio center. Please also check ongoing floating volatility patterns of Byggmax Group and Peab AB.
Diversification Opportunities for Byggmax Group and Peab AB
0.77 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Byggmax and Peab is 0.77. Overlapping area represents the amount of risk that can be diversified away by holding Byggmax Group AB and Peab AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Peab 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 Peab AB. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Peab AB has no effect on the direction of Byggmax Group i.e., Byggmax Group and Peab AB go up and down completely randomly.
Pair Corralation between Byggmax Group and Peab AB
Assuming the 90 days trading horizon Byggmax Group is expected to generate 1.13 times less return on investment than Peab AB. In addition to that, Byggmax Group is 1.44 times more volatile than Peab AB. It trades about 0.08 of its total potential returns per unit of risk. Peab AB is currently generating about 0.13 per unit of volatility. If you would invest 5,455 in Peab AB on September 1, 2024 and sell it today you would earn a total of 2,560 from holding Peab AB or generate 46.93% 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. Peab AB
Performance |
| Timeline |
| Byggmax Group AB |
| Peab AB |
Byggmax Group and Peab AB Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Byggmax Group and Peab AB
The main advantage of trading using opposite Byggmax Group and Peab AB positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Byggmax Group position performs unexpectedly, Peab AB 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 Peab AB will offset losses from the drop in Peab AB's long position.| Byggmax Group vs. NetJobs Group AB | Byggmax Group vs. Mantex AB | Byggmax Group vs. Doxa AB | Byggmax Group vs. Clean Motion AB |
| Peab AB vs. Lundin Mining | Peab AB vs. Media and Games | Peab AB vs. Lohilo Foods AB | Peab AB vs. JLT Mobile Computers |
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 Portfolio File Import module to quickly import all of your third-party portfolios from your local drive in csv format.
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