Correlation Between Better Collective and Betsson AB

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

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

Diversification Opportunities for Better Collective and Betsson AB

-0.05

Correlation Coefficient

Better Collective  Betsson AB

Good diversification

The 3 months correlation between Better and Betsson is -0.05. Overlapping area represents the amount of risk that can be diversified away by holding Better Collective and Betsson AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Betsson AB and Better Collective 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 Better Collective are associated (or correlated) with Betsson AB. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Betsson AB has no effect on the direction of Better Collective i.e., Better Collective and Betsson AB go up and down completely randomly.

Pair Corralation between Better Collective and Betsson AB

Assuming the 90 days trading horizon Better Collective is expected to generate 1.8 times less return on investment than Betsson AB. In addition to that, Better Collective is 2.68 times more volatile than Betsson AB. It trades about 0.06 of its total potential returns per unit of risk. Betsson AB is currently generating about 0.3 per unit of volatility. If you would invest  14,862  in Betsson AB on December 1, 2024 and sell it today you would earn a total of  1,374  from holding Betsson AB or generate 9.25% return on investment over 90 days.

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

Better Collective  vs.  Betsson AB

Better Collective

Risk-Adjusted Performance

Very Weak

Over the last 90 days Better Collective has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest uncertain performance, the Stock's basic indicators remain stable and the newest uproar on Wall Street may also be a sign of mid-term gains for the firm private investors.

Betsson AB

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Betsson AB are ranked lower than 14 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Betsson AB sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Better Collective and Betsson AB

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

The idea behind Better Collective and Betsson 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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.