Correlation Between BIMobject and Rottneros

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

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

Diversification Opportunities for BIMobject and Rottneros

-0.12

Correlation Coefficient

BIMobject  Rottneros

Good diversification

The 3 months correlation between BIMobject and Rottneros is -0.12. Overlapping area represents the amount of risk that can be diversified away by holding BIMobject AB and Rottneros AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Rottneros AB and BIMobject 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 BIMobject AB are associated (or correlated) with Rottneros. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Rottneros AB has no effect on the direction of BIMobject i.e., BIMobject and Rottneros go up and down completely randomly.

Pair Corralation between BIMobject and Rottneros

Assuming the 90 days trading horizon BIMobject AB is expected to generate 1.74 times more return on investment than Rottneros. However, BIMobject is 1.74 times more volatile than Rottneros AB. It trades about 0.14 of its potential returns per unit of risk. Rottneros AB is currently generating about -0.1 per unit of risk. If you would invest  420.00  in BIMobject AB on October 20, 2024 and sell it today you would earn a total of  152.00  from holding BIMobject AB or generate 36.19% return on investment over 90 days.

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

BIMobject AB  vs.  Rottneros AB

BIMobject AB

Risk-Adjusted Performance

13 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in BIMobject AB are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain primary indicators, BIMobject unveiled solid returns over the last few months and may actually be approaching a breakup point.

Rottneros AB

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Rottneros AB 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.

Pair Trading with BIMobject and Rottneros

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

The idea behind BIMobject AB and Rottneros 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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.