Correlation Between Clean Motion and Byggmax Group

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

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

Diversification Opportunities for Clean Motion and Byggmax Group

-0.24

Correlation Coefficient

Clean Motion  Byggmax Group

Very good diversification

The 3 months correlation between Clean and Byggmax is -0.24. Overlapping area represents the amount of risk that can be diversified away by holding Clean Motion AB and Byggmax Group AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Byggmax Group AB and Clean Motion 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 Clean Motion AB are associated (or correlated) with Byggmax Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Byggmax Group AB has no effect on the direction of Clean Motion i.e., Clean Motion and Byggmax Group go up and down completely randomly.

Pair Corralation between Clean Motion and Byggmax Group

Assuming the 90 days trading horizon Clean Motion AB is expected to under-perform the Byggmax Group. In addition to that, Clean Motion is 2.05 times more volatile than Byggmax Group AB. It trades about -0.16 of its total potential returns per unit of risk. Byggmax Group AB is currently generating about 0.05 per unit of volatility. If you would invest  4,104  in Byggmax Group AB on August 31, 2024 and sell it today you would earn a total of  292.00  from holding Byggmax Group AB or generate 7.12% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	98.46%
Values	Daily Returns

Clean Motion AB  vs.  Byggmax Group AB

Clean Motion AB

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Clean Motion AB has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of uncertain performance in the last few months, the Stock's basic indicators remain comparatively stable which may send shares a bit higher in December 2024. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

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 December 2024.

Pair Trading with Clean Motion and Byggmax Group

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

The idea behind Clean Motion AB and Byggmax Group 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 Transaction History module to view history of all your transactions and understand their impact on performance.