Correlation Between Byggmax Group and Nordnet AB
Can any of the company-specific risk be diversified away by investing in both Byggmax Group and Nordnet 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 Nordnet 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 Nordnet AB, you can compare the effects of market volatilities on Byggmax Group and Nordnet 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 Nordnet AB. Check out your portfolio center. Please also check ongoing floating volatility patterns of Byggmax Group and Nordnet AB.
Diversification Opportunities for Byggmax Group and Nordnet AB
0.23 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Byggmax and Nordnet is 0.23. Overlapping area represents the amount of risk that can be diversified away by holding Byggmax Group AB and Nordnet AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nordnet 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 Nordnet AB. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nordnet AB has no effect on the direction of Byggmax Group i.e., Byggmax Group and Nordnet AB go up and down completely randomly.
Pair Corralation between Byggmax Group and Nordnet AB
Assuming the 90 days trading horizon Byggmax Group AB is expected to generate 1.58 times more return on investment than Nordnet AB. However, Byggmax Group is 1.58 times more volatile than Nordnet AB. It trades about 0.08 of its potential returns per unit of risk. Nordnet AB is currently generating about 0.08 per unit of risk. If you would invest 3,390 in Byggmax Group AB on September 3, 2024 and sell it today you would earn a total of 1,006 from holding Byggmax Group AB or generate 29.68% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Byggmax Group AB vs. Nordnet AB
Performance |
| Timeline |
| Byggmax Group AB |
| Nordnet AB |
Byggmax Group and Nordnet AB Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Byggmax Group and Nordnet AB
The main advantage of trading using opposite Byggmax Group and Nordnet AB positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Byggmax Group position performs unexpectedly, Nordnet 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 Nordnet AB will offset losses from the drop in Nordnet AB's long position.| Byggmax Group vs. Clas Ohlson AB | Byggmax Group vs. Inwido AB | Byggmax Group vs. Cloetta AB | Byggmax Group vs. Betsson AB |
| Nordnet AB vs. Avanza Bank Holding | Nordnet AB vs. NIBE Industrier AB | Nordnet AB vs. Sinch AB | Nordnet AB vs. Axfood 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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
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