Correlation Between Bure Equity and Investment
Can any of the company-specific risk be diversified away by investing in both Bure Equity and Investment 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 Investment 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 Investment AB Oresund, you can compare the effects of market volatilities on Bure Equity and Investment 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 Investment. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bure Equity and Investment.
Diversification Opportunities for Bure Equity and Investment
0.81 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Bure and Investment is 0.81. Overlapping area represents the amount of risk that can be diversified away by holding Bure Equity AB and Investment AB Oresund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Investment AB Oresund 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 Investment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Investment AB Oresund has no effect on the direction of Bure Equity i.e., Bure Equity and Investment go up and down completely randomly.
Pair Corralation between Bure Equity and Investment
Assuming the 90 days trading horizon Bure Equity AB is expected to generate 1.17 times more return on investment than Investment. However, Bure Equity is 1.17 times more volatile than Investment AB Oresund. It trades about 0.11 of its potential returns per unit of risk. Investment AB Oresund is currently generating about 0.06 per unit of risk. If you would invest 22,643 in Bure Equity AB on September 1, 2024 and sell it today you would earn a total of 14,257 from holding Bure Equity AB or generate 62.96% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Bure Equity AB vs. Investment AB Oresund
Performance |
| Timeline |
| Bure Equity AB |
| Investment AB Oresund |
Bure Equity and Investment Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bure Equity and Investment
The main advantage of trading using opposite Bure Equity and Investment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bure Equity position performs unexpectedly, Investment 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 Investment will offset losses from the drop in Investment'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 |
| Investment vs. Bure Equity AB | Investment vs. Creades AB | Investment vs. L E Lundbergfretagen | Investment vs. Industrivarden 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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.
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