Correlation Between Byggmax Group and Soder Sportfiske

Can any of the company-specific risk be diversified away by investing in both Byggmax Group and Soder Sportfiske 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 Soder Sportfiske 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 Soder Sportfiske AB, you can compare the effects of market volatilities on Byggmax Group and Soder Sportfiske 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 Soder Sportfiske. Check out your portfolio center. Please also check ongoing floating volatility patterns of Byggmax Group and Soder Sportfiske.

Diversification Opportunities for Byggmax Group and Soder Sportfiske

-0.48

Correlation Coefficient

Byggmax Group  Soder Sportfiske

Very good diversification

The 3 months correlation between Byggmax and Soder is -0.48. Overlapping area represents the amount of risk that can be diversified away by holding Byggmax Group AB and Soder Sportfiske AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Soder Sportfiske 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 Soder Sportfiske. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Soder Sportfiske has no effect on the direction of Byggmax Group i.e., Byggmax Group and Soder Sportfiske go up and down completely randomly.

Pair Corralation between Byggmax Group and Soder Sportfiske

Assuming the 90 days trading horizon Byggmax Group AB is expected to generate 0.58 times more return on investment than Soder Sportfiske. However, Byggmax Group AB is 1.73 times less risky than Soder Sportfiske. It trades about 0.13 of its potential returns per unit of risk. Soder Sportfiske AB is currently generating about -0.06 per unit of risk. If you would invest  4,346  in Byggmax Group AB on September 24, 2024 and sell it today you would earn a total of  188.00  from holding Byggmax Group AB or generate 4.33% 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.  Soder Sportfiske AB

Byggmax Group AB

Risk-Adjusted Performance

4 of 100

Insignificant

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

Soder Sportfiske

Risk-Adjusted Performance

0 of 100

Very Weak

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

Pair Trading with Byggmax Group and Soder Sportfiske

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

The idea behind Byggmax Group AB and Soder Sportfiske 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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..