Correlation Between Bravida Holding and Indutrade
Can any of the company-specific risk be diversified away by investing in both Bravida Holding and Indutrade 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 Indutrade 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 Indutrade AB, you can compare the effects of market volatilities on Bravida Holding and Indutrade 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 Indutrade. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bravida Holding and Indutrade.
Diversification Opportunities for Bravida Holding and Indutrade
0.95 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Bravida and Indutrade is 0.95. Overlapping area represents the amount of risk that can be diversified away by holding Bravida Holding AB and Indutrade AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Indutrade 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 Indutrade. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Indutrade AB has no effect on the direction of Bravida Holding i.e., Bravida Holding and Indutrade go up and down completely randomly.
Pair Corralation between Bravida Holding and Indutrade
Assuming the 90 days trading horizon Bravida Holding AB is expected to generate 0.81 times more return on investment than Indutrade. However, Bravida Holding AB is 1.23 times less risky than Indutrade. It trades about 0.16 of its potential returns per unit of risk. Indutrade AB is currently generating about 0.02 per unit of risk. If you would invest 8,840 in Bravida Holding AB on December 1, 2024 and sell it today you would earn a total of 375.00 from holding Bravida Holding AB or generate 4.24% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Bravida Holding AB vs. Indutrade AB
Performance |
| Timeline |
| Bravida Holding AB |
| Indutrade AB |
Bravida Holding and Indutrade Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bravida Holding and Indutrade
The main advantage of trading using opposite Bravida Holding and Indutrade positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bravida Holding position performs unexpectedly, Indutrade 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 Indutrade will offset losses from the drop in Indutrade's long position.| Bravida Holding vs. Nolato AB | Bravida Holding vs. Indutrade AB | Bravida Holding vs. HEXPOL AB | Bravida Holding vs. Addtech AB |
| Indutrade vs. Lifco AB | Indutrade vs. Addtech AB | Indutrade vs. NIBE Industrier AB | Indutrade vs. Investment AB Latour |
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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.
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