Correlation Between Bygg Partner and Inission

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

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

Diversification Opportunities for Bygg Partner and Inission

0.03

Correlation Coefficient

Bygg Partner  Inission

Significant diversification

The 3 months correlation between Bygg and Inission is 0.03. Overlapping area represents the amount of risk that can be diversified away by holding Bygg Partner i and Inission AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Inission AB and Bygg Partner 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 Bygg Partner i are associated (or correlated) with Inission. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Inission AB has no effect on the direction of Bygg Partner i.e., Bygg Partner and Inission go up and down completely randomly.

Pair Corralation between Bygg Partner and Inission

Assuming the 90 days trading horizon Bygg Partner is expected to generate 1.08 times less return on investment than Inission. In addition to that, Bygg Partner is 1.48 times more volatile than Inission AB. It trades about 0.08 of its total potential returns per unit of risk. Inission AB is currently generating about 0.13 per unit of volatility. If you would invest  3,310  in Inission AB on December 1, 2024 and sell it today you would earn a total of  460.00  from holding Inission AB or generate 13.9% return on investment over 90 days.

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

Bygg Partner i  vs.  Inission AB

Bygg Partner i

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Bygg Partner i are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, Bygg Partner unveiled solid returns over the last few months and may actually be approaching a breakup point.

Inission AB

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Inission AB are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. Despite somewhat uncertain basic indicators, Inission sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Bygg Partner and Inission

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

The idea behind Bygg Partner i and Inission 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.

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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.