Correlation Between Bong AB and Arise Windpower
Can any of the company-specific risk be diversified away by investing in both Bong AB and Arise Windpower 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 Bong AB and Arise Windpower into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Bong AB and Arise Windpower AB, you can compare the effects of market volatilities on Bong AB and Arise Windpower 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 Bong AB with a short position of Arise Windpower. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bong AB and Arise Windpower.
Diversification Opportunities for Bong AB and Arise Windpower
0.15 | Correlation Coefficient |
Average diversification
The 3 months correlation between Bong and Arise is 0.15. Overlapping area represents the amount of risk that can be diversified away by holding Bong AB and Arise Windpower AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Arise Windpower AB and Bong 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 Bong AB are associated (or correlated) with Arise Windpower. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Arise Windpower AB has no effect on the direction of Bong AB i.e., Bong AB and Arise Windpower go up and down completely randomly.
Pair Corralation between Bong AB and Arise Windpower
Assuming the 90 days trading horizon Bong AB is expected to generate 1.36 times more return on investment than Arise Windpower. However, Bong AB is 1.36 times more volatile than Arise Windpower AB. It trades about 0.01 of its potential returns per unit of risk. Arise Windpower AB is currently generating about -0.11 per unit of risk. If you would invest 82.00 in Bong AB on September 1, 2024 and sell it today you would lose (2.00) from holding Bong AB or give up 2.44% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Bong AB vs. Arise Windpower AB
Performance |
| Timeline |
| Bong AB |
| Arise Windpower AB |
Bong AB and Arise Windpower Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bong AB and Arise Windpower
The main advantage of trading using opposite Bong AB and Arise Windpower positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bong AB position performs unexpectedly, Arise Windpower 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 Arise Windpower will offset losses from the drop in Arise Windpower's long position.The idea behind Bong AB and Arise Windpower 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.| Arise Windpower vs. Eolus Vind AB | Arise Windpower vs. SolTech Energy Sweden | Arise Windpower vs. Garo AB | Arise Windpower vs. NOTE 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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.
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