Correlation Between Bjorn Borg and Clas Ohlson
Can any of the company-specific risk be diversified away by investing in both Bjorn Borg and Clas Ohlson 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 Clas Ohlson 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 Clas Ohlson AB, you can compare the effects of market volatilities on Bjorn Borg and Clas Ohlson 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 Clas Ohlson. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bjorn Borg and Clas Ohlson.
Diversification Opportunities for Bjorn Borg and Clas Ohlson
-0.29 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Bjorn and Clas is -0.29. Overlapping area represents the amount of risk that can be diversified away by holding Bjorn Borg AB and Clas Ohlson AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Clas Ohlson 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 Clas Ohlson. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Clas Ohlson AB has no effect on the direction of Bjorn Borg i.e., Bjorn Borg and Clas Ohlson go up and down completely randomly.
Pair Corralation between Bjorn Borg and Clas Ohlson
Assuming the 90 days trading horizon Bjorn Borg is expected to generate 3.24 times less return on investment than Clas Ohlson. But when comparing it to its historical volatility, Bjorn Borg AB is 1.1 times less risky than Clas Ohlson. It trades about 0.15 of its potential returns per unit of risk. Clas Ohlson AB is currently generating about 0.45 of returns per unit of risk over similar time horizon. If you would invest 20,155 in Clas Ohlson AB on November 5, 2024 and sell it today you would earn a total of 3,445 from holding Clas Ohlson AB or generate 17.09% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Bjorn Borg AB vs. Clas Ohlson AB
Performance |
| Timeline |
| Bjorn Borg AB |
| Clas Ohlson AB |
Bjorn Borg and Clas Ohlson Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bjorn Borg and Clas Ohlson
The main advantage of trading using opposite Bjorn Borg and Clas Ohlson positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bjorn Borg position performs unexpectedly, Clas Ohlson 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 Clas Ohlson will offset losses from the drop in Clas Ohlson'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 |
| Clas Ohlson vs. Tele2 AB | Clas Ohlson vs. Axfood AB | Clas Ohlson vs. Telia Company AB | Clas Ohlson vs. Byggmax 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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.
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