Correlation Between Alimak Hek and Balco Group

Can any of the company-specific risk be diversified away by investing in both Alimak Hek and Balco Group 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 Alimak Hek and Balco Group into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Alimak Hek Group and Balco Group AB, you can compare the effects of market volatilities on Alimak Hek and Balco Group 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 Alimak Hek with a short position of Balco Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of Alimak Hek and Balco Group.

Diversification Opportunities for Alimak Hek and Balco Group

-0.78

Correlation Coefficient

Alimak Hek  Balco Group

Pay attention - limited upside

The 3 months correlation between Alimak and Balco is -0.78. Overlapping area represents the amount of risk that can be diversified away by holding Alimak Hek Group and Balco Group AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Balco Group AB and Alimak Hek 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 Alimak Hek Group are associated (or correlated) with Balco Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Balco Group AB has no effect on the direction of Alimak Hek i.e., Alimak Hek and Balco Group go up and down completely randomly.

Pair Corralation between Alimak Hek and Balco Group

Assuming the 90 days trading horizon Alimak Hek Group is expected to generate 0.84 times more return on investment than Balco Group. However, Alimak Hek Group is 1.19 times less risky than Balco Group. It trades about 0.11 of its potential returns per unit of risk. Balco Group AB is currently generating about -0.11 per unit of risk. If you would invest  11,740  in Alimak Hek Group on December 30, 2024 and sell it today you would earn a total of  1,680  from holding Alimak Hek Group or generate 14.31% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	100.0%
Values	Daily Returns

Alimak Hek Group  vs.  Balco Group AB

Alimak Hek Group

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Alimak Hek Group are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, Alimak Hek unveiled solid returns over the last few months and may actually be approaching a breakup point.

Balco Group AB

Risk-Adjusted Performance

Very Weak

Over the last 90 days Balco Group AB has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of uncertain performance in the last few months, the Stock's basic indicators remain comparatively stable which may send shares a bit higher in April 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Pair Trading with Alimak Hek and Balco Group

The main advantage of trading using opposite Alimak Hek and Balco Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Alimak Hek position performs unexpectedly, Balco Group 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 Balco Group will offset losses from the drop in Balco Group's long position.

The idea behind Alimak Hek Group and Balco Group AB pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.