Correlation Between Generic Sweden and Bulten AB
Can any of the company-specific risk be diversified away by investing in both Generic Sweden 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 Generic Sweden and Bulten AB into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Generic Sweden publ and Bulten AB, you can compare the effects of market volatilities on Generic Sweden 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 Generic Sweden with a short position of Bulten AB. Check out your portfolio center. Please also check ongoing floating volatility patterns of Generic Sweden and Bulten AB.
Diversification Opportunities for Generic Sweden and Bulten AB
-0.17 | Correlation Coefficient |
Good diversification
The 3 months correlation between Generic and Bulten is -0.17. Overlapping area represents the amount of risk that can be diversified away by holding Generic Sweden publ and Bulten AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bulten AB and Generic Sweden 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 Generic Sweden publ 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 Generic Sweden i.e., Generic Sweden and Bulten AB go up and down completely randomly.
Pair Corralation between Generic Sweden and Bulten AB
Assuming the 90 days trading horizon Generic Sweden publ is expected to generate 1.12 times more return on investment than Bulten AB. However, Generic Sweden is 1.12 times more volatile than Bulten AB. It trades about 0.02 of its potential returns per unit of risk. Bulten AB is currently generating about -0.26 per unit of risk. If you would invest 5,740 in Generic Sweden publ on January 24, 2025 and sell it today you would earn a total of 20.00 from holding Generic Sweden publ or generate 0.35% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Generic Sweden publ vs. Bulten AB
Performance |
| Timeline |
| Generic Sweden publ |
| Bulten AB |
Generic Sweden and Bulten AB Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Generic Sweden and Bulten AB
The main advantage of trading using opposite Generic Sweden and Bulten AB positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Generic Sweden 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.| Generic Sweden vs. Fingerprint Cards AB | Generic Sweden vs. Anoto Group AB | Generic Sweden vs. Next Biometrics Group | Generic Sweden vs. Idex ASA |
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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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.
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