Correlation Between Nederman Holding and Beijer Alma
Can any of the company-specific risk be diversified away by investing in both Nederman Holding and Beijer Alma 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 Nederman Holding and Beijer Alma into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Nederman Holding AB and Beijer Alma AB, you can compare the effects of market volatilities on Nederman Holding and Beijer Alma 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 Nederman Holding with a short position of Beijer Alma. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nederman Holding and Beijer Alma.
Diversification Opportunities for Nederman Holding and Beijer Alma
-0.46 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Nederman and Beijer is -0.46. Overlapping area represents the amount of risk that can be diversified away by holding Nederman Holding AB and Beijer Alma AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Beijer Alma AB and Nederman 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 Nederman Holding AB are associated (or correlated) with Beijer Alma. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Beijer Alma AB has no effect on the direction of Nederman Holding i.e., Nederman Holding and Beijer Alma go up and down completely randomly.
Pair Corralation between Nederman Holding and Beijer Alma
Assuming the 90 days trading horizon Nederman Holding AB is expected to generate 1.11 times more return on investment than Beijer Alma. However, Nederman Holding is 1.11 times more volatile than Beijer Alma AB. It trades about 0.06 of its potential returns per unit of risk. Beijer Alma AB is currently generating about 0.01 per unit of risk. If you would invest 17,813 in Nederman Holding AB on August 27, 2024 and sell it today you would earn a total of 4,137 from holding Nederman Holding AB or generate 23.22% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Nederman Holding AB vs. Beijer Alma AB
Performance |
| Timeline |
| Nederman Holding |
| Beijer Alma AB |
Nederman Holding and Beijer Alma Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Nederman Holding and Beijer Alma
The main advantage of trading using opposite Nederman Holding and Beijer Alma positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nederman Holding position performs unexpectedly, Beijer Alma 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 Beijer Alma will offset losses from the drop in Beijer Alma's long position.| Nederman Holding vs. Addtech AB | Nederman Holding vs. Teqnion AB | Nederman Holding vs. Vitec Software Group | Nederman Holding vs. Lagercrantz Group AB |
| Beijer Alma vs. Lagercrantz Group AB | Beijer Alma vs. Addtech AB | Beijer Alma vs. AddLife AB | Beijer Alma vs. Bufab Holding 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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.
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