Correlation Between Beijer Alma and NYSE Composite
Can any of the company-specific risk be diversified away by investing in both Beijer Alma and NYSE Composite 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 Beijer Alma and NYSE Composite into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Beijer Alma AB and NYSE Composite, you can compare the effects of market volatilities on Beijer Alma and NYSE Composite 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 Beijer Alma with a short position of NYSE Composite. Check out your portfolio center. Please also check ongoing floating volatility patterns of Beijer Alma and NYSE Composite.
Diversification Opportunities for Beijer Alma and NYSE Composite
0.34 | Correlation Coefficient |
Weak diversification
The 1 month correlation between Beijer and NYSE is 0.34. Overlapping area represents the amount of risk that can be diversified away by holding Beijer Alma AB and NYSE Composite in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NYSE Composite and Beijer Alma 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 Beijer Alma AB are associated (or correlated) with NYSE Composite. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NYSE Composite has no effect on the direction of Beijer Alma i.e., Beijer Alma and NYSE Composite go up and down completely randomly.
Pair Corralation between Beijer Alma and NYSE Composite
Assuming the 90 days trading horizon Beijer Alma AB is expected to generate 3.35 times more return on investment than NYSE Composite. However, Beijer Alma is 3.35 times more volatile than NYSE Composite. It trades about 0.11 of its potential returns per unit of risk. NYSE Composite is currently generating about -0.19 per unit of risk. If you would invest 19,700 in Beijer Alma AB on February 2, 2024 and sell it today you would earn a total of 1,100 from holding Beijer Alma AB or generate 5.58% return on investment over 90 days.
Time Period | 1 Month [change] |
Direction | Moves Together |
Strength | Very Weak |
Accuracy | 95.65% |
Values | Daily Returns |
Beijer Alma AB vs. NYSE Composite
Performance |
Timeline |
Beijer Alma and NYSE Composite Volatility Contrast
Predicted Return Density |
Returns |
Beijer Alma AB
Pair trading matchups for Beijer Alma
NYSE Composite
Pair trading matchups for NYSE Composite
Pair Trading with Beijer Alma and NYSE Composite
The main advantage of trading using opposite Beijer Alma and NYSE Composite positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Beijer Alma position performs unexpectedly, NYSE Composite 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 NYSE Composite will offset losses from the drop in NYSE Composite's long position.Beijer Alma vs. GomSpace Group AB | Beijer Alma vs. Fingerprint Cards AB | Beijer Alma vs. Maha Energy AB | Beijer Alma vs. SolTech Energy Sweden |
NYSE Composite vs. NI Holdings | NYSE Composite vs. Mattel Inc | NYSE Composite vs. Parker Hannifin | NYSE Composite vs. Artisan Partners Asset |
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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