Correlation Between Inwido AB and Bufab Holding
Can any of the company-specific risk be diversified away by investing in both Inwido AB and Bufab Holding 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 Inwido AB and Bufab Holding into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Inwido AB and Bufab Holding AB, you can compare the effects of market volatilities on Inwido AB and Bufab Holding 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 Inwido AB with a short position of Bufab Holding. Check out your portfolio center. Please also check ongoing floating volatility patterns of Inwido AB and Bufab Holding.
Diversification Opportunities for Inwido AB and Bufab Holding
0.09 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Inwido and Bufab is 0.09. Overlapping area represents the amount of risk that can be diversified away by holding Inwido AB and Bufab Holding AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bufab Holding AB and Inwido 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 Inwido AB are associated (or correlated) with Bufab Holding. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bufab Holding AB has no effect on the direction of Inwido AB i.e., Inwido AB and Bufab Holding go up and down completely randomly.
Pair Corralation between Inwido AB and Bufab Holding
Assuming the 90 days trading horizon Inwido AB is expected to generate 1.1 times more return on investment than Bufab Holding. However, Inwido AB is 1.1 times more volatile than Bufab Holding AB. It trades about 0.27 of its potential returns per unit of risk. Bufab Holding AB is currently generating about 0.21 per unit of risk. If you would invest 18,680 in Inwido AB on November 3, 2024 and sell it today you would earn a total of 1,720 from holding Inwido AB or generate 9.21% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Inwido AB vs. Bufab Holding AB
Performance |
| Timeline |
| Inwido AB |
| Bufab Holding AB |
Inwido AB and Bufab Holding Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Inwido AB and Bufab Holding
The main advantage of trading using opposite Inwido AB and Bufab Holding positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Inwido AB position performs unexpectedly, Bufab Holding 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 Bufab Holding will offset losses from the drop in Bufab Holding's long position.| Inwido AB vs. USWE Sports AB | Inwido AB vs. Scandic Hotels Group | Inwido AB vs. FormPipe Software AB | Inwido AB vs. COOR Service Management |
| Bufab Holding vs. Addtech AB | Bufab Holding vs. Indutrade AB | Bufab Holding vs. Troax Group AB | Bufab Holding vs. Beijer Ref 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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.
Other Complementary Tools
| Equity Analysis Research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities | |
| Cryptocurrency Center Build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency | |
| Idea Optimizer Use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio | |
| Stock Screener Find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook. | |
| Technical Analysis Check basic technical indicators and analysis based on most latest market data |