Correlation Between Bure Equity and Catella AB
Can any of the company-specific risk be diversified away by investing in both Bure Equity and Catella 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 Bure Equity and Catella AB into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Bure Equity AB and Catella AB, you can compare the effects of market volatilities on Bure Equity and Catella 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 Bure Equity with a short position of Catella AB. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bure Equity and Catella AB.
Diversification Opportunities for Bure Equity and Catella AB
0.67 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Bure and Catella is 0.67. Overlapping area represents the amount of risk that can be diversified away by holding Bure Equity AB and Catella AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Catella AB and Bure Equity 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 Bure Equity AB are associated (or correlated) with Catella AB. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Catella AB has no effect on the direction of Bure Equity i.e., Bure Equity and Catella AB go up and down completely randomly.
Pair Corralation between Bure Equity and Catella AB
Assuming the 90 days trading horizon Bure Equity AB is expected to generate 0.95 times more return on investment than Catella AB. However, Bure Equity AB is 1.05 times less risky than Catella AB. It trades about 0.08 of its potential returns per unit of risk. Catella AB is currently generating about 0.0 per unit of risk. If you would invest 27,430 in Bure Equity AB on September 4, 2024 and sell it today you would earn a total of 9,470 from holding Bure Equity AB or generate 34.52% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Bure Equity AB vs. Catella AB
Performance |
| Timeline |
| Bure Equity AB |
| Catella AB |
Bure Equity and Catella AB Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bure Equity and Catella AB
The main advantage of trading using opposite Bure Equity and Catella AB positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bure Equity position performs unexpectedly, Catella 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 Catella AB will offset losses from the drop in Catella AB's long position.| Bure Equity vs. Investment AB Latour | Bure Equity vs. Kinnevik Investment AB | Bure Equity vs. Svolder AB | Bure Equity vs. Creades AB |
| Catella AB vs. L E Lundbergfretagen | Catella AB vs. Industrivarden AB ser | Catella AB vs. Svenska Handelsbanken AB | Catella AB vs. Investor AB ser |
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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
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