Correlation Between Bjorn Borg and Arctic Gold
Can any of the company-specific risk be diversified away by investing in both Bjorn Borg and Arctic Gold 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 Bjorn Borg and Arctic Gold into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Bjorn Borg AB and Arctic Gold Publ, you can compare the effects of market volatilities on Bjorn Borg and Arctic Gold 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 Bjorn Borg with a short position of Arctic Gold. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bjorn Borg and Arctic Gold.
Diversification Opportunities for Bjorn Borg and Arctic Gold
-0.38 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Bjorn and Arctic is -0.38. Overlapping area represents the amount of risk that can be diversified away by holding Bjorn Borg AB and Arctic Gold Publ in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Arctic Gold Publ and Bjorn Borg 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 Bjorn Borg AB are associated (or correlated) with Arctic Gold. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Arctic Gold Publ has no effect on the direction of Bjorn Borg i.e., Bjorn Borg and Arctic Gold go up and down completely randomly.
Pair Corralation between Bjorn Borg and Arctic Gold
Assuming the 90 days trading horizon Bjorn Borg AB is expected to generate 0.31 times more return on investment than Arctic Gold. However, Bjorn Borg AB is 3.2 times less risky than Arctic Gold. It trades about -0.15 of its potential returns per unit of risk. Arctic Gold Publ is currently generating about -0.12 per unit of risk. If you would invest 5,678 in Bjorn Borg AB on August 29, 2024 and sell it today you would lose (418.00) from holding Bjorn Borg AB or give up 7.36% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Bjorn Borg AB vs. Arctic Gold Publ
Performance |
| Timeline |
| Bjorn Borg AB |
| Arctic Gold Publ |
Bjorn Borg and Arctic Gold Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bjorn Borg and Arctic Gold
The main advantage of trading using opposite Bjorn Borg and Arctic Gold positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bjorn Borg position performs unexpectedly, Arctic Gold 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 Arctic Gold will offset losses from the drop in Arctic Gold's long position.| Bjorn Borg vs. New Wave Group | Bjorn Borg vs. Clas Ohlson AB | Bjorn Borg vs. BE Group AB | Bjorn Borg vs. Betsson AB |
| Arctic Gold vs. Bjorn Borg AB | Arctic Gold vs. Diadrom Holding AB | Arctic Gold vs. Anoto Group AB | Arctic Gold vs. Cloetta 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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.
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