Correlation Between Bravida Holding and AAK AB
Can any of the company-specific risk be diversified away by investing in both Bravida Holding and AAK AB 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 Bravida Holding and AAK AB into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Bravida Holding AB and AAK AB, you can compare the effects of market volatilities on Bravida Holding and AAK AB 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 Bravida Holding with a short position of AAK AB. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bravida Holding and AAK AB.
Diversification Opportunities for Bravida Holding and AAK AB
-0.42 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Bravida and AAK is -0.42. Overlapping area represents the amount of risk that can be diversified away by holding Bravida Holding AB and AAK AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AAK AB and Bravida Holding 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 Bravida Holding AB are associated (or correlated) with AAK AB. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AAK AB has no effect on the direction of Bravida Holding i.e., Bravida Holding and AAK AB go up and down completely randomly.
Pair Corralation between Bravida Holding and AAK AB
Assuming the 90 days trading horizon Bravida Holding AB is expected to under-perform the AAK AB. In addition to that, Bravida Holding is 1.52 times more volatile than AAK AB. It trades about -0.01 of its total potential returns per unit of risk. AAK AB is currently generating about 0.08 per unit of volatility. If you would invest 17,309 in AAK AB on August 26, 2024 and sell it today you would earn a total of 10,911 from holding AAK AB or generate 63.04% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Bravida Holding AB vs. AAK AB
Performance |
| Timeline |
| Bravida Holding AB |
| AAK AB |
Bravida Holding and AAK AB Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bravida Holding and AAK AB
The main advantage of trading using opposite Bravida Holding and AAK AB positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bravida Holding position performs unexpectedly, AAK AB 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 AAK AB will offset losses from the drop in AAK AB's long position.| Bravida Holding vs. Addtech AB | Bravida Holding vs. Teqnion AB | Bravida Holding vs. Vitec Software Group | Bravida Holding vs. Lagercrantz Group AB |
| AAK AB vs. Castellum AB | AAK AB vs. Tele2 AB | AAK AB vs. Investor AB ser | AAK AB vs. Kinnevik Investment 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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.
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