Correlation Between Vestum AB and Bravida Holding
Can any of the company-specific risk be diversified away by investing in both Vestum AB and Bravida Holding 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 Vestum AB and Bravida Holding into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Vestum AB and Bravida Holding AB, you can compare the effects of market volatilities on Vestum AB and Bravida Holding 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 Vestum AB with a short position of Bravida Holding. Check out your portfolio center. Please also check ongoing floating volatility patterns of Vestum AB and Bravida Holding.
Diversification Opportunities for Vestum AB and Bravida Holding
0.3 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Vestum and Bravida is 0.3. Overlapping area represents the amount of risk that can be diversified away by holding Vestum AB and Bravida Holding AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bravida Holding AB and Vestum 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 Vestum AB are associated (or correlated) with Bravida Holding. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bravida Holding AB has no effect on the direction of Vestum AB i.e., Vestum AB and Bravida Holding go up and down completely randomly.
Pair Corralation between Vestum AB and Bravida Holding
Assuming the 90 days trading horizon Vestum AB is expected to under-perform the Bravida Holding. In addition to that, Vestum AB is 1.36 times more volatile than Bravida Holding AB. It trades about -0.18 of its total potential returns per unit of risk. Bravida Holding AB is currently generating about 0.04 per unit of volatility. If you would invest 7,815 in Bravida Holding AB on August 30, 2024 and sell it today you would earn a total of 85.00 from holding Bravida Holding AB or generate 1.09% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Vestum AB vs. Bravida Holding AB
Performance |
| Timeline |
| Vestum AB |
| Bravida Holding AB |
Vestum AB and Bravida Holding Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Vestum AB and Bravida Holding
The main advantage of trading using opposite Vestum AB and Bravida Holding positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Vestum AB position performs unexpectedly, Bravida Holding 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 Bravida Holding will offset losses from the drop in Bravida Holding's long position.| Vestum AB vs. Sweco AB | Vestum AB vs. AAK AB | Vestum AB vs. Beijer Ref AB | Vestum AB vs. Bravida Holding AB |
| Bravida Holding vs. Nolato AB | Bravida Holding vs. Indutrade AB | Bravida Holding vs. HEXPOL AB | Bravida Holding vs. Addtech 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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..
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