Correlation Between XANO Industri and Beijer Ref
Can any of the company-specific risk be diversified away by investing in both XANO Industri and Beijer Ref 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 XANO Industri and Beijer Ref into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between XANO Industri AB and Beijer Ref AB, you can compare the effects of market volatilities on XANO Industri and Beijer Ref 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 XANO Industri with a short position of Beijer Ref. Check out your portfolio center. Please also check ongoing floating volatility patterns of XANO Industri and Beijer Ref.
Diversification Opportunities for XANO Industri and Beijer Ref
-0.16 | Correlation Coefficient |
Good diversification
The 3 months correlation between XANO and Beijer is -0.16. Overlapping area represents the amount of risk that can be diversified away by holding XANO Industri AB and Beijer Ref AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Beijer Ref AB and XANO Industri 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 XANO Industri AB are associated (or correlated) with Beijer Ref. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Beijer Ref AB has no effect on the direction of XANO Industri i.e., XANO Industri and Beijer Ref go up and down completely randomly.
Pair Corralation between XANO Industri and Beijer Ref
Assuming the 90 days trading horizon XANO Industri AB is expected to generate 1.17 times more return on investment than Beijer Ref. However, XANO Industri is 1.17 times more volatile than Beijer Ref AB. It trades about 0.07 of its potential returns per unit of risk. Beijer Ref AB is currently generating about 0.03 per unit of risk. If you would invest 5,710 in XANO Industri AB on September 12, 2024 and sell it today you would earn a total of 170.00 from holding XANO Industri AB or generate 2.98% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
XANO Industri AB vs. Beijer Ref AB
Performance |
| Timeline |
| XANO Industri AB |
| Beijer Ref AB |
XANO Industri and Beijer Ref Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with XANO Industri and Beijer Ref
The main advantage of trading using opposite XANO Industri and Beijer Ref positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if XANO Industri position performs unexpectedly, Beijer Ref 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 Beijer Ref will offset losses from the drop in Beijer Ref's long position.| XANO Industri vs. GomSpace Group AB | XANO Industri vs. Fingerprint Cards AB | XANO Industri vs. Maha Energy AB | XANO Industri vs. SolTech Energy Sweden |
| Beijer Ref vs. Addtech AB | Beijer Ref vs. Indutrade AB | Beijer Ref vs. Lifco AB | Beijer Ref vs. NIBE Industrier 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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.
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