Correlation Between Bambuser and Realfiction Holding
Can any of the company-specific risk be diversified away by investing in both Bambuser and Realfiction Holding 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 Bambuser and Realfiction Holding into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Bambuser AB and Realfiction Holding AB, you can compare the effects of market volatilities on Bambuser and Realfiction Holding 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 Bambuser with a short position of Realfiction Holding. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bambuser and Realfiction Holding.
Diversification Opportunities for Bambuser and Realfiction Holding
0.68 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Bambuser and Realfiction is 0.68. Overlapping area represents the amount of risk that can be diversified away by holding Bambuser AB and Realfiction Holding AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Realfiction Holding and Bambuser 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 Bambuser AB are associated (or correlated) with Realfiction Holding. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Realfiction Holding has no effect on the direction of Bambuser i.e., Bambuser and Realfiction Holding go up and down completely randomly.
Pair Corralation between Bambuser and Realfiction Holding
Assuming the 90 days trading horizon Bambuser AB is expected to under-perform the Realfiction Holding. In addition to that, Bambuser is 2.07 times more volatile than Realfiction Holding AB. It trades about -0.21 of its total potential returns per unit of risk. Realfiction Holding AB is currently generating about -0.09 per unit of volatility. If you would invest 1,600 in Realfiction Holding AB on August 26, 2024 and sell it today you would lose (114.00) from holding Realfiction Holding AB or give up 7.12% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Bambuser AB vs. Realfiction Holding AB
Performance |
| Timeline |
| Bambuser AB |
| Realfiction Holding |
Bambuser and Realfiction Holding Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bambuser and Realfiction Holding
The main advantage of trading using opposite Bambuser and Realfiction Holding positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bambuser position performs unexpectedly, Realfiction Holding 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 Realfiction Holding will offset losses from the drop in Realfiction Holding's long position.| Bambuser vs. Spectrumone publ AB | Bambuser vs. Media and Games | Bambuser vs. Enersize Oy | Bambuser vs. Cantargia AB |
| Realfiction Holding vs. Sivers IMA Holding | Realfiction Holding vs. AAC Clyde Space | Realfiction Holding vs. Kancera AB | Realfiction Holding vs. Bambuser 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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.
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