Correlation Between Bure Equity and Koninklijke Heijmans
Can any of the company-specific risk be diversified away by investing in both Bure Equity and Koninklijke Heijmans 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 Bure Equity and Koninklijke Heijmans into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Bure Equity AB and Koninklijke Heijmans NV, you can compare the effects of market volatilities on Bure Equity and Koninklijke Heijmans 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 Bure Equity with a short position of Koninklijke Heijmans. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bure Equity and Koninklijke Heijmans.
Diversification Opportunities for Bure Equity and Koninklijke Heijmans
0.73 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Bure and Koninklijke is 0.73. Overlapping area represents the amount of risk that can be diversified away by holding Bure Equity AB and Koninklijke Heijmans NV in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Koninklijke Heijmans and Bure Equity 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 Bure Equity AB are associated (or correlated) with Koninklijke Heijmans. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Koninklijke Heijmans has no effect on the direction of Bure Equity i.e., Bure Equity and Koninklijke Heijmans go up and down completely randomly.
Pair Corralation between Bure Equity and Koninklijke Heijmans
Assuming the 90 days trading horizon Bure Equity is expected to generate 3.39 times less return on investment than Koninklijke Heijmans. But when comparing it to its historical volatility, Bure Equity AB is 1.64 times less risky than Koninklijke Heijmans. It trades about 0.12 of its potential returns per unit of risk. Koninklijke Heijmans NV is currently generating about 0.25 of returns per unit of risk over similar time horizon. If you would invest 1,385 in Koninklijke Heijmans NV on March 3, 2024 and sell it today you would earn a total of 630.00 from holding Koninklijke Heijmans NV or generate 45.49% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Significant |
Accuracy | 98.39% |
Values | Daily Returns |
Bure Equity AB vs. Koninklijke Heijmans NV
Performance |
Timeline |
Bure Equity AB |
Koninklijke Heijmans |
Bure Equity and Koninklijke Heijmans Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Bure Equity and Koninklijke Heijmans
The main advantage of trading using opposite Bure Equity and Koninklijke Heijmans positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bure Equity position performs unexpectedly, Koninklijke Heijmans 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 Koninklijke Heijmans will offset losses from the drop in Koninklijke Heijmans' long position.Bure Equity vs. Investment AB Latour | Bure Equity vs. Kinnevik Investment AB | Bure Equity vs. L E Lundbergfretagen | Bure Equity vs. Hitech Development Wireless |
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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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
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