Correlation Between Wilh Wilhelmsen and Byggma
Can any of the company-specific risk be diversified away by investing in both Wilh Wilhelmsen and Byggma 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 Wilh Wilhelmsen and Byggma into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Wilh Wilhelmsen Holding and Byggma, you can compare the effects of market volatilities on Wilh Wilhelmsen and Byggma 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 Wilh Wilhelmsen with a short position of Byggma. Check out your portfolio center. Please also check ongoing floating volatility patterns of Wilh Wilhelmsen and Byggma.
Diversification Opportunities for Wilh Wilhelmsen and Byggma
-0.04 | Correlation Coefficient |
Good diversification
The 3 months correlation between Wilh and Byggma is -0.04. Overlapping area represents the amount of risk that can be diversified away by holding Wilh Wilhelmsen Holding and Byggma in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Byggma and Wilh Wilhelmsen 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 Wilh Wilhelmsen Holding are associated (or correlated) with Byggma. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Byggma has no effect on the direction of Wilh Wilhelmsen i.e., Wilh Wilhelmsen and Byggma go up and down completely randomly.
Pair Corralation between Wilh Wilhelmsen and Byggma
Assuming the 90 days trading horizon Wilh Wilhelmsen Holding is expected to generate 0.65 times more return on investment than Byggma. However, Wilh Wilhelmsen Holding is 1.55 times less risky than Byggma. It trades about 0.04 of its potential returns per unit of risk. Byggma is currently generating about -0.05 per unit of risk. If you would invest 37,861 in Wilh Wilhelmsen Holding on September 1, 2024 and sell it today you would earn a total of 2,639 from holding Wilh Wilhelmsen Holding or generate 6.97% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Wilh Wilhelmsen Holding vs. Byggma
Performance |
| Timeline |
| Wilh Wilhelmsen Holding |
| Byggma |
Wilh Wilhelmsen and Byggma Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Wilh Wilhelmsen and Byggma
The main advantage of trading using opposite Wilh Wilhelmsen and Byggma positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Wilh Wilhelmsen position performs unexpectedly, Byggma 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 Byggma will offset losses from the drop in Byggma's long position.| Wilh Wilhelmsen vs. Eidesvik Offshore ASA | Wilh Wilhelmsen vs. Borgestad A | Wilh Wilhelmsen vs. Kitron ASA | Wilh Wilhelmsen vs. Havila Shipping ASA |
| Byggma vs. AF Gruppen ASA | Byggma vs. American Shipping | Byggma vs. Arendals Fossekompani ASA | Byggma vs. Kid ASA |
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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.
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