Correlation Between Bonzun AB and AVTECH Sweden
Can any of the company-specific risk be diversified away by investing in both Bonzun AB and AVTECH Sweden 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 Bonzun AB and AVTECH Sweden into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Bonzun AB and AVTECH Sweden AB, you can compare the effects of market volatilities on Bonzun AB and AVTECH Sweden 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 Bonzun AB with a short position of AVTECH Sweden. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bonzun AB and AVTECH Sweden.
Diversification Opportunities for Bonzun AB and AVTECH Sweden
0.88 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Bonzun and AVTECH is 0.88. Overlapping area represents the amount of risk that can be diversified away by holding Bonzun AB and AVTECH Sweden AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AVTECH Sweden AB and Bonzun 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 Bonzun AB are associated (or correlated) with AVTECH Sweden. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AVTECH Sweden AB has no effect on the direction of Bonzun AB i.e., Bonzun AB and AVTECH Sweden go up and down completely randomly.
Pair Corralation between Bonzun AB and AVTECH Sweden
Assuming the 90 days trading horizon Bonzun AB is expected to under-perform the AVTECH Sweden. In addition to that, Bonzun AB is 2.26 times more volatile than AVTECH Sweden AB. It trades about -0.04 of its total potential returns per unit of risk. AVTECH Sweden AB is currently generating about 0.03 per unit of volatility. If you would invest 294.00 in AVTECH Sweden AB on September 3, 2024 and sell it today you would earn a total of 101.00 from holding AVTECH Sweden AB or generate 34.35% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Bonzun AB vs. AVTECH Sweden AB
Performance |
| Timeline |
| Bonzun AB |
| AVTECH Sweden AB |
Bonzun AB and AVTECH Sweden Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bonzun AB and AVTECH Sweden
The main advantage of trading using opposite Bonzun AB and AVTECH Sweden positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bonzun AB position performs unexpectedly, AVTECH Sweden 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 AVTECH Sweden will offset losses from the drop in AVTECH Sweden's long position.| Bonzun AB vs. Enersize Oy | Bonzun AB vs. Diagonal Bio AB | Bonzun AB vs. NetJobs Group AB | Bonzun AB vs. Clean Motion AB |
| AVTECH Sweden vs. AroCell AB | AVTECH Sweden vs. aXichem AB | AVTECH Sweden vs. Gaming Corps AB | AVTECH Sweden vs. Alelion Energy Systems |
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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.
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