Correlation Between BE Group and Nobia AB

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

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

Diversification Opportunities for BE Group and Nobia AB

-0.34

Correlation Coefficient

BE Group  Nobia AB

Very good diversification

The 3 months correlation between BEGR and Nobia is -0.34. Overlapping area represents the amount of risk that can be diversified away by holding BE Group AB and Nobia AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nobia AB and BE 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 BE Group AB are associated (or correlated) with Nobia AB. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nobia AB has no effect on the direction of BE Group i.e., BE Group and Nobia AB go up and down completely randomly.

Pair Corralation between BE Group and Nobia AB

Assuming the 90 days trading horizon BE Group AB is expected to generate 0.69 times more return on investment than Nobia AB. However, BE Group AB is 1.44 times less risky than Nobia AB. It trades about 0.04 of its potential returns per unit of risk. Nobia AB is currently generating about -0.07 per unit of risk. If you would invest  4,420  in BE Group AB on December 10, 2024 and sell it today you would earn a total of  55.00  from holding BE Group AB or generate 1.24% return on investment over 90 days.

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

BE Group AB  vs.  Nobia AB

BE Group AB

Risk-Adjusted Performance

Very Weak

Over the last 90 days BE Group AB has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, BE Group is not utilizing all of its potentials. The current stock price uproar, may contribute to short-horizon losses for the private investors.

Nobia AB

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Nobia AB are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively weak basic indicators, Nobia AB may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Pair Trading with BE Group and Nobia AB

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

The idea behind BE Group AB and Nobia 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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.