Correlation Between Balco Group and Alimak Hek

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

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

Diversification Opportunities for Balco Group and Alimak Hek

-0.78

Correlation Coefficient

Balco Group  Alimak Hek

Pay attention - limited upside

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

Pair Corralation between Balco Group and Alimak Hek

Assuming the 90 days trading horizon Balco Group AB is expected to under-perform the Alimak Hek. In addition to that, Balco Group is 1.19 times more volatile than Alimak Hek Group. It trades about -0.11 of its total potential returns per unit of risk. Alimak Hek Group is currently generating about 0.11 per unit of volatility. 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

Balco Group AB  vs.  Alimak Hek Group

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.

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.

Pair Trading with Balco Group and Alimak Hek

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

The idea behind Balco Group AB and Alimak Hek Group 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 Money Managers module to screen money managers from public funds and ETFs managed around the world.