Correlation Between Diadrom Holding and Binero Group
Can any of the company-specific risk be diversified away by investing in both Diadrom Holding and Binero 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 Diadrom Holding and Binero Group into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Diadrom Holding AB and Binero Group AB, you can compare the effects of market volatilities on Diadrom Holding and Binero 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 Diadrom Holding with a short position of Binero Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of Diadrom Holding and Binero Group.
Diversification Opportunities for Diadrom Holding and Binero Group
0.5 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Diadrom and Binero is 0.5. Overlapping area represents the amount of risk that can be diversified away by holding Diadrom Holding AB and Binero Group AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Binero Group AB and Diadrom Holding 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 Diadrom Holding AB are associated (or correlated) with Binero Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Binero Group AB has no effect on the direction of Diadrom Holding i.e., Diadrom Holding and Binero Group go up and down completely randomly.
Pair Corralation between Diadrom Holding and Binero Group
Assuming the 90 days trading horizon Diadrom Holding AB is expected to under-perform the Binero Group. But the stock apears to be less risky and, when comparing its historical volatility, Diadrom Holding AB is 1.35 times less risky than Binero Group. The stock trades about -0.16 of its potential returns per unit of risk. The Binero Group AB is currently generating about 0.0 of returns per unit of risk over similar time horizon. If you would invest 260.00 in Binero Group AB on September 3, 2024 and sell it today you would lose (8.00) from holding Binero Group AB or give up 3.08% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Diadrom Holding AB vs. Binero Group AB
Performance |
| Timeline |
| Diadrom Holding AB |
| Binero Group AB |
Diadrom Holding and Binero Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Diadrom Holding and Binero Group
The main advantage of trading using opposite Diadrom Holding and Binero Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Diadrom Holding position performs unexpectedly, Binero 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 Binero Group will offset losses from the drop in Binero Group's long position.| Diadrom Holding vs. Enea AB | Diadrom Holding vs. Novotek AB | Diadrom Holding vs. Addnode Group AB | Diadrom Holding vs. Softronic AB |
| Binero Group vs. Generic Sweden publ | Binero Group vs. Divio Technologies AB | Binero Group vs. Diadrom Holding AB | Binero Group vs. FlexQube 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 Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
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