Correlation Between Bonava AB and Peab AB
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By analyzing existing cross correlation between Bonava AB and Peab AB, you can compare the effects of market volatilities on Bonava AB 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 Bonava AB with a short position of Peab AB. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bonava AB and Peab AB.
Diversification Opportunities for Bonava AB and Peab AB
Very good diversification
The 3 months correlation between Bonava and Peab is -0.31. Overlapping area represents the amount of risk that can be diversified away by holding Bonava AB and Peab AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Peab AB and Bonava 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 Bonava 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 Bonava AB i.e., Bonava AB and Peab AB go up and down completely randomly.
Pair Corralation between Bonava AB and Peab AB
Assuming the 90 days trading horizon Bonava AB is expected to under-perform the Peab AB. In addition to that, Bonava AB is 2.17 times more volatile than Peab AB. It trades about -0.27 of its total potential returns per unit of risk. Peab AB is currently generating about -0.03 per unit of volatility. If you would invest 8,110 in Peab AB on September 1, 2024 and sell it today you would lose (95.00) from holding Peab AB or give up 1.17% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.65% |
| Values | Daily Returns |
Bonava AB vs. Peab AB
Performance |
| Timeline |
| Bonava AB |
| Peab AB |
Bonava AB and Peab AB Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bonava AB and Peab AB
The main advantage of trading using opposite Bonava AB and Peab AB positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bonava AB 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.The idea behind Bonava AB and Peab AB pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| 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 Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
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