Correlation Between Bjorn Borg and BE Group
Can any of the company-specific risk be diversified away by investing in both Bjorn Borg and BE 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 Bjorn Borg and BE Group 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 BE Group AB, you can compare the effects of market volatilities on Bjorn Borg and BE 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 Bjorn Borg with a short position of BE Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bjorn Borg and BE Group.
Diversification Opportunities for Bjorn Borg and BE Group
0.46 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Bjorn and BEGR is 0.46. Overlapping area represents the amount of risk that can be diversified away by holding Bjorn Borg AB and BE Group AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BE Group AB 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 BE Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BE Group AB has no effect on the direction of Bjorn Borg i.e., Bjorn Borg and BE Group go up and down completely randomly.
Pair Corralation between Bjorn Borg and BE Group
Assuming the 90 days trading horizon Bjorn Borg AB is expected to generate 1.66 times more return on investment than BE Group. However, Bjorn Borg is 1.66 times more volatile than BE Group AB. It trades about -0.09 of its potential returns per unit of risk. BE Group AB is currently generating about -0.31 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 (263.00) from holding Bjorn Borg AB or give up 4.63% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Bjorn Borg AB vs. BE Group AB
Performance |
| Timeline |
| Bjorn Borg AB |
| BE Group AB |
Bjorn Borg and BE Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bjorn Borg and BE Group
The main advantage of trading using opposite Bjorn Borg and BE Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bjorn Borg position performs unexpectedly, BE 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 BE Group will offset losses from the drop in BE Group'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 |
| BE Group vs. Addtech AB | BE Group vs. Teqnion AB | BE Group vs. Vitec Software Group | BE Group vs. Lagercrantz Group 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 Portfolio Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
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