Correlation Between Byggmax Group and Telia Company
Can any of the company-specific risk be diversified away by investing in both Byggmax Group and Telia Company 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 Telia Company 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 Telia Company AB, you can compare the effects of market volatilities on Byggmax Group and Telia Company 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 Telia Company. Check out your portfolio center. Please also check ongoing floating volatility patterns of Byggmax Group and Telia Company.
Diversification Opportunities for Byggmax Group and Telia Company
-0.2 | Correlation Coefficient |
Good diversification
The 3 months correlation between Byggmax and Telia is -0.2. Overlapping area represents the amount of risk that can be diversified away by holding Byggmax Group AB and Telia Company AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Telia Company 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 Telia Company. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Telia Company has no effect on the direction of Byggmax Group i.e., Byggmax Group and Telia Company go up and down completely randomly.
Pair Corralation between Byggmax Group and Telia Company
Assuming the 90 days trading horizon Byggmax Group AB is expected to generate 2.62 times more return on investment than Telia Company. However, Byggmax Group is 2.62 times more volatile than Telia Company AB. It trades about 0.15 of its potential returns per unit of risk. Telia Company AB is currently generating about 0.03 per unit of risk. If you would invest 3,950 in Byggmax Group AB on August 25, 2024 and sell it today you would earn a total of 484.00 from holding Byggmax Group AB or generate 12.25% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Byggmax Group AB vs. Telia Company AB
Performance |
| Timeline |
| Byggmax Group AB |
| Telia Company |
Byggmax Group and Telia Company Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Byggmax Group and Telia Company
The main advantage of trading using opposite Byggmax Group and Telia Company positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Byggmax Group position performs unexpectedly, Telia Company 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 Telia Company will offset losses from the drop in Telia Company's long position.| Byggmax Group vs. Clas Ohlson AB | Byggmax Group vs. Inwido AB | Byggmax Group vs. Cloetta AB | Byggmax Group vs. Betsson AB |
| Telia Company vs. Alfa Laval AB | Telia Company vs. Anoto Group AB | Telia Company vs. Active Biotech AB | Telia Company vs. BioInvent International 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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.
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