Correlation Between Bjorn Borg and H M

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

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

Diversification Opportunities for Bjorn Borg and H M

0.45

Correlation Coefficient

Bjorn Borg  H M

Very weak diversification

The 3 months correlation between Bjorn and HM-B is 0.45. Overlapping area represents the amount of risk that can be diversified away by holding Bjorn Borg 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 Bjorn Borg 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 Bjorn Borg 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 Bjorn Borg i.e., Bjorn Borg and H M go up and down completely randomly.

Pair Corralation between Bjorn Borg and H M

Assuming the 90 days trading horizon Bjorn Borg AB is expected to generate 1.01 times more return on investment than H M. However, Bjorn Borg is 1.01 times more volatile than H M Hennes. It trades about 0.04 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  5,161  in Bjorn Borg AB on December 30, 2024 and sell it today you would earn a total of  148.00  from holding Bjorn Borg AB or generate 2.87% return on investment over 90 days.

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

Bjorn Borg AB  vs.  H M Hennes

Bjorn Borg AB

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Bjorn Borg AB are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable basic indicators, Bjorn Borg is not utilizing all of its potentials. The current stock price uproar, may contribute to short-horizon losses for the private investors.

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 Bjorn Borg and H M

The main advantage of trading using opposite Bjorn Borg and H M positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bjorn Borg 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 Bjorn Borg 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.

Check out your portfolio center.

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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.