Correlation Between Teqnion AB and BE Group
Can any of the company-specific risk be diversified away by investing in both Teqnion AB and BE 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 Teqnion AB and BE Group into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Teqnion AB and BE Group AB, you can compare the effects of market volatilities on Teqnion AB and BE 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 Teqnion AB with a short position of BE Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of Teqnion AB and BE Group.
Diversification Opportunities for Teqnion AB and BE Group
0.76 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Teqnion and BEGR is 0.76. Overlapping area represents the amount of risk that can be diversified away by holding Teqnion AB and BE Group AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BE Group AB and Teqnion 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 Teqnion AB are associated (or correlated) with BE Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BE Group AB has no effect on the direction of Teqnion AB i.e., Teqnion AB and BE Group go up and down completely randomly.
Pair Corralation between Teqnion AB and BE Group
Assuming the 90 days trading horizon Teqnion AB is expected to under-perform the BE Group. But the stock apears to be less risky and, when comparing its historical volatility, Teqnion AB is 1.24 times less risky than BE Group. The stock trades about -0.66 of its potential returns per unit of risk. The BE Group AB is currently generating about -0.31 of returns per unit of risk over similar time horizon. If you would invest 4,980 in BE Group AB on August 28, 2024 and sell it today you would lose (410.00) from holding BE Group AB or give up 8.23% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Teqnion AB vs. BE Group AB
Performance |
| Timeline |
| Teqnion AB |
| BE Group AB |
Teqnion AB and BE Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Teqnion AB and BE Group
The main advantage of trading using opposite Teqnion AB and BE Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Teqnion AB position performs unexpectedly, BE 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 BE Group will offset losses from the drop in BE Group's long position.The idea behind Teqnion AB and BE Group AB pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| BE Group vs. Addtech AB | BE Group vs. Teqnion AB | BE Group vs. Vitec Software Group | BE Group vs. Lagercrantz Group 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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.
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