Correlation Between Boozt AB and BHG Group
Can any of the company-specific risk be diversified away by investing in both Boozt AB and BHG 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 Boozt AB and BHG Group into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Boozt AB and BHG Group AB, you can compare the effects of market volatilities on Boozt AB and BHG 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 Boozt AB with a short position of BHG Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of Boozt AB and BHG Group.
Diversification Opportunities for Boozt AB and BHG Group
Very weak diversification
The 3 months correlation between Boozt and BHG is 0.57. Overlapping area represents the amount of risk that can be diversified away by holding Boozt AB and BHG Group AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BHG Group AB and Boozt 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 Boozt AB are associated (or correlated) with BHG Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BHG Group AB has no effect on the direction of Boozt AB i.e., Boozt AB and BHG Group go up and down completely randomly.
Pair Corralation between Boozt AB and BHG Group
Assuming the 90 days trading horizon Boozt AB is expected to generate 39.14 times less return on investment than BHG Group. But when comparing it to its historical volatility, Boozt AB is 1.58 times less risky than BHG Group. It trades about 0.0 of its potential returns per unit of risk. BHG Group AB is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 1,514 in BHG Group AB on October 23, 2024 and sell it today you would earn a total of 466.00 from holding BHG Group AB or generate 30.78% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Boozt AB vs. BHG Group AB
Performance |
| Timeline |
| Boozt AB |
| BHG Group AB |
Boozt AB and BHG Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Boozt AB and BHG Group
The main advantage of trading using opposite Boozt AB and BHG Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Boozt AB position performs unexpectedly, BHG 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 BHG Group will offset losses from the drop in BHG Group's long position.The idea behind Boozt AB and BHG 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.| BHG Group vs. Sinch AB | BHG Group vs. Byggmax Group AB | BHG Group vs. Stillfront Group AB | BHG Group vs. Boozt 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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..
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