Correlation Between Boliden AB and Husqvarna
Can any of the company-specific risk be diversified away by investing in both Boliden AB and Husqvarna 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 Husqvarna into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Boliden AB and Husqvarna AB, you can compare the effects of market volatilities on Boliden AB and Husqvarna 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 Husqvarna. Check out your portfolio center. Please also check ongoing floating volatility patterns of Boliden AB and Husqvarna.
Diversification Opportunities for Boliden AB and Husqvarna
0.68 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Boliden and Husqvarna is 0.68. Overlapping area represents the amount of risk that can be diversified away by holding Boliden AB and Husqvarna AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Husqvarna 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 Husqvarna. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Husqvarna AB has no effect on the direction of Boliden AB i.e., Boliden AB and Husqvarna go up and down completely randomly.
Pair Corralation between Boliden AB and Husqvarna
Assuming the 90 days trading horizon Boliden AB is expected to generate 1.29 times more return on investment than Husqvarna. However, Boliden AB is 1.29 times more volatile than Husqvarna AB. It trades about -0.05 of its potential returns per unit of risk. Husqvarna AB is currently generating about -0.38 per unit of risk. If you would invest 33,600 in Boliden AB on August 28, 2024 and sell it today you would lose (920.00) from holding Boliden AB or give up 2.74% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Boliden AB vs. Husqvarna AB
Performance |
| Timeline |
| Boliden AB |
| Husqvarna AB |
Boliden AB and Husqvarna Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Boliden AB and Husqvarna
The main advantage of trading using opposite Boliden AB and Husqvarna positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Boliden AB position performs unexpectedly, Husqvarna 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 Husqvarna will offset losses from the drop in Husqvarna's long position.| Boliden AB vs. Svenska Aerogel Holding | Boliden AB vs. Kancera AB | Boliden AB vs. BIMobject AB | Boliden AB vs. KABE Group AB |
| Husqvarna vs. AB Electrolux | Husqvarna vs. Stora Enso Oyj | Husqvarna vs. Industrivarden AB ser | Husqvarna vs. Holmen 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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.
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