Correlation Between Boliden AB and BillerudKorsnas
Can any of the company-specific risk be diversified away by investing in both Boliden AB and BillerudKorsnas 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 Boliden AB and BillerudKorsnas into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Boliden AB and BillerudKorsnas AB, you can compare the effects of market volatilities on Boliden AB and BillerudKorsnas 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 Boliden AB with a short position of BillerudKorsnas. Check out your portfolio center. Please also check ongoing floating volatility patterns of Boliden AB and BillerudKorsnas.
Diversification Opportunities for Boliden AB and BillerudKorsnas
0.22 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Boliden and BillerudKorsnas is 0.22. Overlapping area represents the amount of risk that can be diversified away by holding Boliden AB and BillerudKorsnas AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BillerudKorsnas AB and Boliden AB 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 Boliden AB are associated (or correlated) with BillerudKorsnas. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BillerudKorsnas AB has no effect on the direction of Boliden AB i.e., Boliden AB and BillerudKorsnas go up and down completely randomly.
Pair Corralation between Boliden AB and BillerudKorsnas
Assuming the 90 days trading horizon Boliden AB is expected to generate 0.8 times more return on investment than BillerudKorsnas. However, Boliden AB is 1.25 times less risky than BillerudKorsnas. It trades about -0.09 of its potential returns per unit of risk. BillerudKorsnas AB is currently generating about -0.2 per unit of risk. If you would invest 33,310 in Boliden AB on August 24, 2024 and sell it today you would lose (1,560) from holding Boliden AB or give up 4.68% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Boliden AB vs. BillerudKorsnas AB
Performance |
| Timeline |
| Boliden AB |
| BillerudKorsnas AB |
Boliden AB and BillerudKorsnas Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Boliden AB and BillerudKorsnas
The main advantage of trading using opposite Boliden AB and BillerudKorsnas positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Boliden AB position performs unexpectedly, BillerudKorsnas 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 BillerudKorsnas will offset losses from the drop in BillerudKorsnas' long position.| Boliden AB vs. Sandvik AB | Boliden AB vs. AB SKF | Boliden AB vs. Alfa Laval AB | Boliden AB vs. AB Electrolux |
| BillerudKorsnas vs. Svenska Aerogel Holding | BillerudKorsnas vs. Kancera AB | BillerudKorsnas vs. BIMobject AB | BillerudKorsnas vs. KABE Group 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 Portfolio Center module to all portfolio management and optimization tools to improve performance of your portfolios.
Other Complementary Tools
| Portfolio Optimization Compute new portfolio that will generate highest expected return given your specified tolerance for risk | |
| Equity Search Search for actively traded equities including funds and ETFs from over 30 global markets | |
| Bonds Directory Find actively traded corporate debentures issued by US companies | |
| Content Syndication Quickly integrate customizable finance content to your own investment portal | |
| Options Analysis Analyze and evaluate options and option chains as a potential hedge for your portfolios |