Correlation Between Bong AB and Actic Group
Can any of the company-specific risk be diversified away by investing in both Bong AB and Actic Group 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 Actic Group into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Bong AB and Actic Group AB, you can compare the effects of market volatilities on Bong AB and Actic Group 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 Actic Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bong AB and Actic Group.
Diversification Opportunities for Bong AB and Actic Group
0.09 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Bong and Actic is 0.09. Overlapping area represents the amount of risk that can be diversified away by holding Bong AB and Actic Group AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Actic Group 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 Actic Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Actic Group AB has no effect on the direction of Bong AB i.e., Bong AB and Actic Group go up and down completely randomly.
Pair Corralation between Bong AB and Actic Group
Assuming the 90 days trading horizon Bong AB is expected to under-perform the Actic Group. But the stock apears to be less risky and, when comparing its historical volatility, Bong AB is 1.5 times less risky than Actic Group. The stock trades about -0.11 of its potential returns per unit of risk. The Actic Group AB is currently generating about -0.05 of returns per unit of risk over similar time horizon. If you would invest 640.00 in Actic Group AB on September 1, 2024 and sell it today you would lose (40.00) from holding Actic Group AB or give up 6.25% 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. Actic Group AB
Performance |
| Timeline |
| Bong AB |
| Actic Group AB |
Bong AB and Actic Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bong AB and Actic Group
The main advantage of trading using opposite Bong AB and Actic Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bong AB position performs unexpectedly, Actic Group 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 Actic Group will offset losses from the drop in Actic Group's long position.The idea behind Bong AB and Actic Group 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.| Actic Group vs. Bjorn Borg AB | Actic Group vs. Starbreeze AB | Actic Group vs. Bong AB | Actic Group vs. Alimak Hek Group |
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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.
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