Correlation Between Bjorn Borg and H M
Can any of the company-specific risk be diversified away by investing in both Bjorn Borg and H M 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 H M 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 H M Hennes, you can compare the effects of market volatilities on Bjorn Borg and H M 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 H M. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bjorn Borg and H M.
Diversification Opportunities for Bjorn Borg and H M
0.39 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Bjorn and HM-B is 0.39. Overlapping area represents the amount of risk that can be diversified away by holding Bjorn Borg AB and H M Hennes in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on H M Hennes 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 H M. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of H M Hennes has no effect on the direction of Bjorn Borg i.e., Bjorn Borg and H M go up and down completely randomly.
Pair Corralation between Bjorn Borg and H M
Assuming the 90 days trading horizon Bjorn Borg AB is expected to generate 0.9 times more return on investment than H M. However, Bjorn Borg AB is 1.11 times less risky than H M. It trades about 0.06 of its potential returns per unit of risk. H M Hennes is currently generating about 0.04 per unit of risk. If you would invest 3,140 in Bjorn Borg AB on September 3, 2024 and sell it today you would earn a total of 1,857 from holding Bjorn Borg AB or generate 59.14% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Bjorn Borg AB vs. H M Hennes
Performance |
| Timeline |
| Bjorn Borg AB |
| H M Hennes |
Bjorn Borg and H M Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bjorn Borg and H M
The main advantage of trading using opposite Bjorn Borg and H M positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bjorn Borg position performs unexpectedly, H M 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 H M will offset losses from the drop in H M'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 |
| H M vs. Telefonaktiebolaget LM Ericsson | H M vs. Swedbank AB | H M vs. AB Electrolux | H M vs. Investor AB ser |
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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.
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