Correlation Between Bure Equity and TF Bank
Can any of the company-specific risk be diversified away by investing in both Bure Equity and TF Bank 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 TF Bank 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 TF Bank AB, you can compare the effects of market volatilities on Bure Equity and TF Bank 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 TF Bank. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bure Equity and TF Bank.
Diversification Opportunities for Bure Equity and TF Bank
-0.71 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Bure and TFBANK is -0.71. Overlapping area represents the amount of risk that can be diversified away by holding Bure Equity AB and TF Bank AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on TF Bank 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 TF Bank. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of TF Bank AB has no effect on the direction of Bure Equity i.e., Bure Equity and TF Bank go up and down completely randomly.
Pair Corralation between Bure Equity and TF Bank
Assuming the 90 days trading horizon Bure Equity AB is expected to under-perform the TF Bank. But the stock apears to be less risky and, when comparing its historical volatility, Bure Equity AB is 1.31 times less risky than TF Bank. The stock trades about -0.07 of its potential returns per unit of risk. The TF Bank AB is currently generating about 0.17 of returns per unit of risk over similar time horizon. If you would invest 25,000 in TF Bank AB on August 28, 2024 and sell it today you would earn a total of 6,400 from holding TF Bank AB or generate 25.6% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Bure Equity AB vs. TF Bank AB
Performance |
| Timeline |
| Bure Equity AB |
| TF Bank AB |
Bure Equity and TF Bank Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bure Equity and TF Bank
The main advantage of trading using opposite Bure Equity and TF Bank positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bure Equity position performs unexpectedly, TF Bank 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 TF Bank will offset losses from the drop in TF Bank'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 |
| TF Bank vs. Creades AB | TF Bank vs. L E Lundbergfretagen | TF Bank vs. Industrivarden AB ser | TF Bank 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 CEOs Directory module to screen CEOs from public companies around the world.
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