Correlation Between Bambuser and Sivers IMA
Can any of the company-specific risk be diversified away by investing in both Bambuser and Sivers IMA 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 Sivers IMA into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Bambuser AB and Sivers IMA Holding, you can compare the effects of market volatilities on Bambuser and Sivers IMA 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 Sivers IMA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bambuser and Sivers IMA.
Diversification Opportunities for Bambuser and Sivers IMA
0.88 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Bambuser and Sivers is 0.88. Overlapping area represents the amount of risk that can be diversified away by holding Bambuser AB and Sivers IMA Holding in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sivers IMA 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 Sivers IMA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sivers IMA Holding has no effect on the direction of Bambuser i.e., Bambuser and Sivers IMA go up and down completely randomly.
Pair Corralation between Bambuser and Sivers IMA
Assuming the 90 days trading horizon Bambuser AB is expected to generate 0.61 times more return on investment than Sivers IMA. However, Bambuser AB is 1.63 times less risky than Sivers IMA. It trades about -0.19 of its potential returns per unit of risk. Sivers IMA Holding is currently generating about -0.17 per unit of risk. If you would invest 80.00 in Bambuser AB on August 29, 2024 and sell it today you would lose (23.00) from holding Bambuser AB or give up 28.75% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Bambuser AB vs. Sivers IMA Holding
Performance |
| Timeline |
| Bambuser AB |
| Sivers IMA Holding |
Bambuser and Sivers IMA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bambuser and Sivers IMA
The main advantage of trading using opposite Bambuser and Sivers IMA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bambuser position performs unexpectedly, Sivers IMA 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 Sivers IMA will offset losses from the drop in Sivers IMA's long position.The idea behind Bambuser AB and Sivers IMA Holding pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| Sivers IMA vs. Hexatronic Group AB | Sivers IMA vs. Sinch AB | Sivers IMA vs. Embracer Group AB | Sivers IMA vs. SolTech Energy Sweden |
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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
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