Correlation Between Bjorn Borg and Softronic
Can any of the company-specific risk be diversified away by investing in both Bjorn Borg and Softronic 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 Softronic 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 Softronic AB, you can compare the effects of market volatilities on Bjorn Borg and Softronic 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 Softronic. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bjorn Borg and Softronic.
Diversification Opportunities for Bjorn Borg and Softronic
-0.52 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Bjorn and Softronic is -0.52. Overlapping area represents the amount of risk that can be diversified away by holding Bjorn Borg AB and Softronic AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Softronic 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 Softronic. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Softronic AB has no effect on the direction of Bjorn Borg i.e., Bjorn Borg and Softronic go up and down completely randomly.
Pair Corralation between Bjorn Borg and Softronic
Assuming the 90 days trading horizon Bjorn Borg AB is expected to under-perform the Softronic. In addition to that, Bjorn Borg is 1.79 times more volatile than Softronic AB. It trades about -0.22 of its total potential returns per unit of risk. Softronic AB is currently generating about 0.1 per unit of volatility. If you would invest 2,370 in Softronic AB on August 31, 2024 and sell it today you would earn a total of 65.00 from holding Softronic AB or generate 2.74% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Bjorn Borg AB vs. Softronic AB
Performance |
| Timeline |
| Bjorn Borg AB |
| Softronic AB |
Bjorn Borg and Softronic Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bjorn Borg and Softronic
The main advantage of trading using opposite Bjorn Borg and Softronic positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bjorn Borg position performs unexpectedly, Softronic 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 Softronic will offset losses from the drop in Softronic'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 |
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 File Import module to quickly import all of your third-party portfolios from your local drive in csv format.
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