Correlation Between MapsPeople and Broedrene
Can any of the company-specific risk be diversified away by investing in both MapsPeople and Broedrene 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 MapsPeople and Broedrene into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between MapsPeople AS and Broedrene AO Johansen, you can compare the effects of market volatilities on MapsPeople and Broedrene 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 MapsPeople with a short position of Broedrene. Check out your portfolio center. Please also check ongoing floating volatility patterns of MapsPeople and Broedrene.
Diversification Opportunities for MapsPeople and Broedrene
0.49 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between MapsPeople and Broedrene is 0.49. Overlapping area represents the amount of risk that can be diversified away by holding MapsPeople AS and Broedrene AO Johansen in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Broedrene AO Johansen and MapsPeople 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 MapsPeople AS are associated (or correlated) with Broedrene. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Broedrene AO Johansen has no effect on the direction of MapsPeople i.e., MapsPeople and Broedrene go up and down completely randomly.
Pair Corralation between MapsPeople and Broedrene
Assuming the 90 days trading horizon MapsPeople AS is expected to under-perform the Broedrene. In addition to that, MapsPeople is 6.71 times more volatile than Broedrene AO Johansen. It trades about -0.03 of its total potential returns per unit of risk. Broedrene AO Johansen is currently generating about -0.11 per unit of volatility. If you would invest 8,470 in Broedrene AO Johansen on August 25, 2024 and sell it today you would lose (350.00) from holding Broedrene AO Johansen or give up 4.13% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 95.65% |
| Values | Daily Returns |
MapsPeople AS vs. Broedrene AO Johansen
Performance |
| Timeline |
| MapsPeople AS |
| Broedrene AO Johansen |
MapsPeople and Broedrene Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with MapsPeople and Broedrene
The main advantage of trading using opposite MapsPeople and Broedrene positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if MapsPeople position performs unexpectedly, Broedrene 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 Broedrene will offset losses from the drop in Broedrene's long position.| MapsPeople vs. Konsolidator AS | MapsPeople vs. Sparinvest INDEX Globale | MapsPeople vs. Bavarian Nordic | MapsPeople vs. Investeringsselskabet Luxor AS |
| Broedrene vs. North Media AS | Broedrene vs. Solar AS | Broedrene vs. Per Aarsleff Holding | Broedrene vs. HusCompagniet AS |
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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..
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