Correlation Between Creades AB and Bure Equity
Can any of the company-specific risk be diversified away by investing in both Creades AB and Bure Equity 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 Creades AB and Bure Equity into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Creades AB and Bure Equity AB, you can compare the effects of market volatilities on Creades AB and Bure Equity 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 Creades AB with a short position of Bure Equity. Check out your portfolio center. Please also check ongoing floating volatility patterns of Creades AB and Bure Equity.
Diversification Opportunities for Creades AB and Bure Equity
0.25 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Creades and Bure is 0.25. Overlapping area represents the amount of risk that can be diversified away by holding Creades AB and Bure Equity AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bure Equity AB and Creades AB 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 Creades AB are associated (or correlated) with Bure Equity. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bure Equity AB has no effect on the direction of Creades AB i.e., Creades AB and Bure Equity go up and down completely randomly.
Pair Corralation between Creades AB and Bure Equity
Assuming the 90 days trading horizon Creades AB is expected to generate 1.22 times more return on investment than Bure Equity. However, Creades AB is 1.22 times more volatile than Bure Equity AB. It trades about 0.0 of its potential returns per unit of risk. Bure Equity AB is currently generating about -0.07 per unit of risk. If you would invest 7,250 in Creades AB on August 28, 2024 and sell it today you would lose (85.00) from holding Creades AB or give up 1.17% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Creades AB vs. Bure Equity AB
Performance |
| Timeline |
| Creades AB |
| Bure Equity AB |
Creades AB and Bure Equity Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Creades AB and Bure Equity
The main advantage of trading using opposite Creades AB and Bure Equity positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Creades AB position performs unexpectedly, Bure Equity 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 Bure Equity will offset losses from the drop in Bure Equity's long position.| Creades AB vs. Norva24 Group AB | Creades AB vs. KABE Group AB | Creades AB vs. IAR Systems Group | Creades AB vs. Clinical Laserthermia Systems |
| Bure Equity vs. Investment AB Latour | Bure Equity vs. Kinnevik Investment AB | Bure Equity vs. Svolder AB | Bure Equity vs. Creades 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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.
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