Correlation Between Bulten AB and DistIT AB
Can any of the company-specific risk be diversified away by investing in both Bulten AB and DistIT 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 Bulten AB and DistIT AB into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Bulten AB and DistIT AB, you can compare the effects of market volatilities on Bulten AB and DistIT 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 Bulten AB with a short position of DistIT AB. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bulten AB and DistIT AB.
Diversification Opportunities for Bulten AB and DistIT AB
Very good diversification
The 3 months correlation between Bulten and DistIT is -0.3. Overlapping area represents the amount of risk that can be diversified away by holding Bulten AB and DistIT AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on DistIT AB and Bulten AB 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 Bulten AB are associated (or correlated) with DistIT AB. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of DistIT AB has no effect on the direction of Bulten AB i.e., Bulten AB and DistIT AB go up and down completely randomly.
Pair Corralation between Bulten AB and DistIT AB
Assuming the 90 days trading horizon Bulten AB is expected to generate 0.4 times more return on investment than DistIT AB. However, Bulten AB is 2.51 times less risky than DistIT AB. It trades about 0.02 of its potential returns per unit of risk. DistIT AB is currently generating about -0.41 per unit of risk. If you would invest 6,820 in Bulten AB on September 3, 2024 and sell it today you would earn a total of 30.00 from holding Bulten AB or generate 0.44% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Bulten AB vs. DistIT AB
Performance |
| Timeline |
| Bulten AB |
| DistIT AB |
Bulten AB and DistIT AB Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bulten AB and DistIT AB
The main advantage of trading using opposite Bulten AB and DistIT AB positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bulten AB position performs unexpectedly, DistIT 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 DistIT AB will offset losses from the drop in DistIT AB's long position.| Bulten AB vs. Inwido AB | Bulten AB vs. Clas Ohlson AB | Bulten AB vs. Bufab Holding AB | Bulten AB vs. Byggmax Group AB |
| DistIT AB vs. Alcadon Group AB | DistIT AB vs. IAR Systems Group | DistIT AB vs. Bulten AB | DistIT AB vs. Dustin 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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..
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