Correlation Between Bufab Holding and Alimak Hek
Can any of the company-specific risk be diversified away by investing in both Bufab Holding and Alimak Hek 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 Bufab Holding and Alimak Hek into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Bufab Holding AB and Alimak Hek Group, you can compare the effects of market volatilities on Bufab Holding and Alimak Hek 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 Bufab Holding with a short position of Alimak Hek. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bufab Holding and Alimak Hek.
Diversification Opportunities for Bufab Holding and Alimak Hek
-0.13 | Correlation Coefficient |
Good diversification
The 3 months correlation between Bufab and Alimak is -0.13. Overlapping area represents the amount of risk that can be diversified away by holding Bufab Holding AB and Alimak Hek Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Alimak Hek Group and Bufab 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 Bufab Holding AB are associated (or correlated) with Alimak Hek. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Alimak Hek Group has no effect on the direction of Bufab Holding i.e., Bufab Holding and Alimak Hek go up and down completely randomly.
Pair Corralation between Bufab Holding and Alimak Hek
Assuming the 90 days trading horizon Bufab Holding AB is expected to generate 1.19 times more return on investment than Alimak Hek. However, Bufab Holding is 1.19 times more volatile than Alimak Hek Group. It trades about 0.18 of its potential returns per unit of risk. Alimak Hek Group is currently generating about -0.07 per unit of risk. If you would invest 38,620 in Bufab Holding AB on August 31, 2024 and sell it today you would earn a total of 2,400 from holding Bufab Holding AB or generate 6.21% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Bufab Holding AB vs. Alimak Hek Group
Performance |
| Timeline |
| Bufab Holding AB |
| Alimak Hek Group |
Bufab Holding and Alimak Hek Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bufab Holding and Alimak Hek
The main advantage of trading using opposite Bufab Holding and Alimak Hek positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bufab Holding position performs unexpectedly, Alimak Hek 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 Alimak Hek will offset losses from the drop in Alimak Hek's long position.| Bufab Holding vs. Addtech AB | Bufab Holding vs. Indutrade AB | Bufab Holding vs. Troax Group AB | Bufab Holding vs. Beijer Ref AB |
| Alimak Hek vs. Inwido AB | Alimak Hek vs. Bufab Holding AB | Alimak Hek vs. Cloetta AB | Alimak Hek vs. Dometic 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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.
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