Correlation Between Nolato AB and Beijer Alma
Can any of the company-specific risk be diversified away by investing in both Nolato AB 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 Nolato AB and Beijer Alma into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Nolato AB and Beijer Alma AB, you can compare the effects of market volatilities on Nolato AB 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 Nolato AB with a short position of Beijer Alma. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nolato AB and Beijer Alma.
Diversification Opportunities for Nolato AB and Beijer Alma
-0.13 | Correlation Coefficient |
Good diversification
The 3 months correlation between Nolato and Beijer is -0.13. Overlapping area represents the amount of risk that can be diversified away by holding Nolato 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 Nolato 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 Nolato 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 Nolato AB i.e., Nolato AB and Beijer Alma go up and down completely randomly.
Pair Corralation between Nolato AB and Beijer Alma
Assuming the 90 days trading horizon Nolato AB is expected to generate 1.34 times more return on investment than Beijer Alma. However, Nolato AB is 1.34 times more volatile than Beijer Alma AB. It trades about 0.0 of its potential returns per unit of risk. Beijer Alma AB is currently generating about -0.07 per unit of risk. If you would invest 5,270 in Nolato AB on August 24, 2024 and sell it today you would lose (25.00) from holding Nolato AB or give up 0.47% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Nolato AB vs. Beijer Alma AB
Performance |
| Timeline |
| Nolato AB |
| Beijer Alma AB |
Nolato AB and Beijer Alma Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Nolato AB and Beijer Alma
The main advantage of trading using opposite Nolato AB and Beijer Alma positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nolato AB 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.| Nolato AB vs. HEXPOL AB | Nolato AB vs. Trelleborg AB | Nolato AB vs. Indutrade AB | Nolato AB vs. Vitrolife AB |
| Beijer Alma vs. Beijer Ref AB | Beijer Alma vs. Indutrade AB | Beijer Alma vs. Addtech AB | Beijer Alma vs. Nolato 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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.
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