Correlation Between Byggmax Group and H M

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

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

Diversification Opportunities for Byggmax Group and H M

-0.46

Correlation Coefficient

Byggmax Group  H M

Very good diversification

The 3 months correlation between Byggmax and HM-B is -0.46. Overlapping area represents the amount of risk that can be diversified away by holding Byggmax Group AB and H M Hennes in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on H M Hennes and Byggmax 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 Byggmax Group AB are associated (or correlated) with H M. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of H M Hennes has no effect on the direction of Byggmax Group i.e., Byggmax Group and H M go up and down completely randomly.

Pair Corralation between Byggmax Group and H M

Assuming the 90 days trading horizon Byggmax Group AB is expected to generate 1.18 times more return on investment than H M. However, Byggmax Group is 1.18 times more volatile than H M Hennes. It trades about 0.13 of its potential returns per unit of risk. H M Hennes is currently generating about -0.11 per unit of risk. If you would invest  4,566  in Byggmax Group AB on December 27, 2024 and sell it today you would earn a total of  664.00  from holding Byggmax Group AB or generate 14.54% return on investment over 90 days.

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

Byggmax Group AB  vs.  H M Hennes

Byggmax Group AB

Risk-Adjusted Performance

OK

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

H M Hennes

Risk-Adjusted Performance

Very Weak

Over the last 90 days H M Hennes has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest weak 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 Byggmax Group and H M

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

The idea behind Byggmax Group AB and H M Hennes 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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.