Correlation Between Bambuser and Transtema Group
Can any of the company-specific risk be diversified away by investing in both Bambuser and Transtema Group 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 Transtema Group into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Bambuser AB and Transtema Group AB, you can compare the effects of market volatilities on Bambuser and Transtema Group 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 Transtema Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bambuser and Transtema Group.
Diversification Opportunities for Bambuser and Transtema Group
-0.65 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Bambuser and Transtema is -0.65. Overlapping area represents the amount of risk that can be diversified away by holding Bambuser AB and Transtema Group AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Transtema Group AB 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 Transtema Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Transtema Group AB has no effect on the direction of Bambuser i.e., Bambuser and Transtema Group go up and down completely randomly.
Pair Corralation between Bambuser and Transtema Group
Assuming the 90 days trading horizon Bambuser AB is expected to under-perform the Transtema Group. In addition to that, Bambuser is 1.71 times more volatile than Transtema Group AB. It trades about -0.04 of its total potential returns per unit of risk. Transtema Group AB is currently generating about -0.03 per unit of volatility. If you would invest 3,106 in Transtema Group AB on September 5, 2024 and sell it today you would lose (1,520) from holding Transtema Group AB or give up 48.94% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 99.8% |
| Values | Daily Returns |
Bambuser AB vs. Transtema Group AB
Performance |
| Timeline |
| Bambuser AB |
| Transtema Group AB |
Bambuser and Transtema Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bambuser and Transtema Group
The main advantage of trading using opposite Bambuser and Transtema Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bambuser position performs unexpectedly, Transtema Group 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 Transtema Group will offset losses from the drop in Transtema Group's long position.| Bambuser vs. Kancera AB | Bambuser vs. Terranet AB | Bambuser vs. Divio Technologies AB | Bambuser vs. Cantargia AB |
| Transtema Group vs. Hexatronic Group AB | Transtema Group vs. Systemair AB | Transtema Group vs. Resurs Holding AB | Transtema Group vs. Prevas 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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
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