Correlation Between Qleanair Holding and Bawat Water
Can any of the company-specific risk be diversified away by investing in both Qleanair Holding and Bawat Water 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 Qleanair Holding and Bawat Water into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Qleanair Holding AB and Bawat Water Technologies, you can compare the effects of market volatilities on Qleanair Holding and Bawat Water 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 Qleanair Holding with a short position of Bawat Water. Check out your portfolio center. Please also check ongoing floating volatility patterns of Qleanair Holding and Bawat Water.
Diversification Opportunities for Qleanair Holding and Bawat Water
0.82 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Qleanair and Bawat is 0.82. Overlapping area represents the amount of risk that can be diversified away by holding Qleanair Holding AB and Bawat Water Technologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bawat Water Technologies and Qleanair 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 Qleanair Holding AB are associated (or correlated) with Bawat Water. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bawat Water Technologies has no effect on the direction of Qleanair Holding i.e., Qleanair Holding and Bawat Water go up and down completely randomly.
Pair Corralation between Qleanair Holding and Bawat Water
Assuming the 90 days trading horizon Qleanair Holding AB is expected to under-perform the Bawat Water. But the stock apears to be less risky and, when comparing its historical volatility, Qleanair Holding AB is 2.38 times less risky than Bawat Water. The stock trades about -0.35 of its potential returns per unit of risk. The Bawat Water Technologies is currently generating about -0.11 of returns per unit of risk over similar time horizon. If you would invest 137.00 in Bawat Water Technologies on September 1, 2024 and sell it today you would lose (37.00) from holding Bawat Water Technologies or give up 27.01% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Qleanair Holding AB vs. Bawat Water Technologies
Performance |
| Timeline |
| Qleanair Holding |
| Bawat Water Technologies |
Qleanair Holding and Bawat Water Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Qleanair Holding and Bawat Water
The main advantage of trading using opposite Qleanair Holding and Bawat Water positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Qleanair Holding position performs unexpectedly, Bawat Water 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 Bawat Water will offset losses from the drop in Bawat Water's long position.| Qleanair Holding vs. Storytel AB | Qleanair Holding vs. Stillfront Group AB | Qleanair Holding vs. Hexatronic Group AB | Qleanair Holding vs. Jetpak Top Holding |
| Bawat Water vs. Qleanair Holding AB | Bawat Water vs. CirChem AB | Bawat Water vs. KABE Group AB | Bawat Water vs. IAR Systems Group |
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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.
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