Correlation Between BII Railway and SOEDER SPORTFISKE

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

By analyzing existing cross correlation between BII Railway Transportation and SOEDER SPORTFISKE AB, you can compare the effects of market volatilities on BII Railway and SOEDER 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 BII Railway with a short position of SOEDER SPORTFISKE. Check out your portfolio center. Please also check ongoing floating volatility patterns of BII Railway and SOEDER SPORTFISKE.

Diversification Opportunities for BII Railway and SOEDER SPORTFISKE

0.24

Correlation Coefficient

BII Railway  SOEDER SPORTFISKE

Modest diversification

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

Pair Corralation between BII Railway and SOEDER SPORTFISKE

Assuming the 90 days horizon BII Railway is expected to generate 1.41 times less return on investment than SOEDER SPORTFISKE. But when comparing it to its historical volatility, BII Railway Transportation is 1.19 times less risky than SOEDER SPORTFISKE. It trades about 0.02 of its potential returns per unit of risk. SOEDER SPORTFISKE AB is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest  196.00  in SOEDER SPORTFISKE AB on October 4, 2024 and sell it today you would earn a total of  11.00  from holding SOEDER SPORTFISKE AB or generate 5.61% return on investment over 90 days.

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

BII Railway Transportation  vs.  SOEDER SPORTFISKE AB

BII Railway Transpor

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days BII Railway Transportation has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fragile performance in the last few months, the Stock's basic indicators remain nearly stable which may send shares a bit higher in February 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

SOEDER SPORTFISKE

Risk-Adjusted Performance

0 of 100

Very Weak

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

Pair Trading with BII Railway and SOEDER SPORTFISKE

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

The idea behind BII Railway Transportation and SOEDER 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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.