Correlation Between Tele2 AB and Byggmax Group
Can any of the company-specific risk be diversified away by investing in both Tele2 AB and Byggmax Group 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 Tele2 AB and Byggmax Group into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Tele2 AB and Byggmax Group AB, you can compare the effects of market volatilities on Tele2 AB and Byggmax Group 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 Tele2 AB with a short position of Byggmax Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of Tele2 AB and Byggmax Group.
Diversification Opportunities for Tele2 AB and Byggmax Group
0.67 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Tele2 and Byggmax is 0.67. Overlapping area represents the amount of risk that can be diversified away by holding Tele2 AB and Byggmax Group AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Byggmax Group AB and Tele2 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 Tele2 AB are associated (or correlated) with Byggmax Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Byggmax Group AB has no effect on the direction of Tele2 AB i.e., Tele2 AB and Byggmax Group go up and down completely randomly.
Pair Corralation between Tele2 AB and Byggmax Group
Assuming the 90 days trading horizon Tele2 AB is expected to generate 0.57 times more return on investment than Byggmax Group. However, Tele2 AB is 1.75 times less risky than Byggmax Group. It trades about 0.07 of its potential returns per unit of risk. Byggmax Group AB is currently generating about 0.04 per unit of risk. If you would invest 8,224 in Tele2 AB on November 9, 2024 and sell it today you would earn a total of 4,071 from holding Tele2 AB or generate 49.5% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Tele2 AB vs. Byggmax Group AB
Performance |
| Timeline |
| Tele2 AB |
| Byggmax Group AB |
Tele2 AB and Byggmax Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Tele2 AB and Byggmax Group
The main advantage of trading using opposite Tele2 AB and Byggmax Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Tele2 AB position performs unexpectedly, Byggmax Group 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 Byggmax Group will offset losses from the drop in Byggmax Group's long position.| Tele2 AB vs. Telia Company AB | Tele2 AB vs. Skanska AB | Tele2 AB vs. AB Electrolux | Tele2 AB vs. Svenska Handelsbanken AB |
| Byggmax Group vs. Clas Ohlson AB | Byggmax Group vs. Inwido AB | Byggmax Group vs. Cloetta AB | Byggmax Group vs. Betsson 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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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