Correlation Between Clas Ohlson and Bulten AB
Can any of the company-specific risk be diversified away by investing in both Clas Ohlson and Bulten AB 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 Clas Ohlson and Bulten AB into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Clas Ohlson AB and Bulten AB, you can compare the effects of market volatilities on Clas Ohlson and Bulten AB 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 Clas Ohlson with a short position of Bulten AB. Check out your portfolio center. Please also check ongoing floating volatility patterns of Clas Ohlson and Bulten AB.
Diversification Opportunities for Clas Ohlson and Bulten AB
-0.15 | Correlation Coefficient |
Good diversification
The 3 months correlation between Clas and Bulten is -0.15. Overlapping area represents the amount of risk that can be diversified away by holding Clas Ohlson AB and Bulten AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bulten AB and Clas Ohlson 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 Clas Ohlson AB are associated (or correlated) with Bulten AB. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bulten AB has no effect on the direction of Clas Ohlson i.e., Clas Ohlson and Bulten AB go up and down completely randomly.
Pair Corralation between Clas Ohlson and Bulten AB
Assuming the 90 days trading horizon Clas Ohlson AB is expected to generate 0.79 times more return on investment than Bulten AB. However, Clas Ohlson AB is 1.26 times less risky than Bulten AB. It trades about 0.35 of its potential returns per unit of risk. Bulten AB is currently generating about -0.06 per unit of risk. If you would invest 17,610 in Clas Ohlson AB on August 30, 2024 and sell it today you would earn a total of 2,210 from holding Clas Ohlson AB or generate 12.55% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.65% |
| Values | Daily Returns |
Clas Ohlson AB vs. Bulten AB
Performance |
| Timeline |
| Clas Ohlson AB |
| Bulten AB |
Clas Ohlson and Bulten AB Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Clas Ohlson and Bulten AB
The main advantage of trading using opposite Clas Ohlson and Bulten AB positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Clas Ohlson position performs unexpectedly, Bulten AB 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 Bulten AB will offset losses from the drop in Bulten AB's long position.| Clas Ohlson vs. Volati AB | Clas Ohlson vs. Bredband2 i Skandinavien | Clas Ohlson vs. Instalco Intressenter AB | Clas Ohlson vs. Teqnion AB |
| Bulten AB vs. Inwido AB | Bulten AB vs. Clas Ohlson AB | Bulten AB vs. Bufab Holding AB | Bulten AB vs. Byggmax Group 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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.
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