Correlation Between Byggmax Group and Transportadora

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

Diversification Opportunities for Byggmax Group and Transportadora

0.0

Correlation Coefficient

Byggmax Group  Transportadora

Pay attention - limited upside

The 3 months correlation between Byggmax and Transportadora is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Byggmax Group AB and Transportadora de Gas in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Transportadora de Gas 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 Transportadora. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Transportadora de Gas has no effect on the direction of Byggmax Group i.e., Byggmax Group and Transportadora go up and down completely randomly.

Pair Corralation between Byggmax Group and Transportadora

If you would invest  1,870  in Transportadora de Gas on September 15, 2024 and sell it today you would earn a total of  850.00  from holding Transportadora de Gas or generate 45.45% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	1.54%
Values	Daily Returns

Byggmax Group AB  vs.  Transportadora de Gas

Byggmax Group AB

Risk-Adjusted Performance

0 of 100

Insignificant

Over the last 90 days Byggmax Group AB has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, Byggmax Group is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Transportadora de Gas

Risk-Adjusted Performance

12 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Transportadora de Gas are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. Despite nearly uncertain forward-looking signals, Transportadora reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Byggmax Group and Transportadora

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

The idea behind Byggmax Group AB and Transportadora de Gas 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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.