Correlation Between COOR Service and Byggmax Group

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

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

Diversification Opportunities for COOR Service and Byggmax Group

-0.12

Correlation Coefficient

COOR Service  Byggmax Group

Good diversification

The 3 months correlation between COOR and Byggmax is -0.12. Overlapping area represents the amount of risk that can be diversified away by holding COOR Service Management 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 COOR Service 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 COOR Service Management 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 COOR Service i.e., COOR Service and Byggmax Group go up and down completely randomly.

Pair Corralation between COOR Service and Byggmax Group

Assuming the 90 days trading horizon COOR Service Management is expected to under-perform the Byggmax Group. In addition to that, COOR Service is 2.65 times more volatile than Byggmax Group AB. It trades about -0.09 of its total potential returns per unit of risk. Byggmax Group AB is currently generating about 0.15 per unit of volatility. If you would invest  4,534  in Byggmax Group AB on October 21, 2024 and sell it today you would earn a total of  156.00  from holding Byggmax Group AB or generate 3.44% return on investment over 90 days.

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

COOR Service Management  vs.  Byggmax Group AB

COOR Service Management

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days COOR Service Management has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of weak performance in the last few months, the Stock's basic indicators remain comparatively stable which may send shares a bit higher in February 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Byggmax Group AB

Risk-Adjusted Performance

10 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Byggmax Group AB are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively weak basic indicators, Byggmax Group unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with COOR Service and Byggmax Group

The main advantage of trading using opposite COOR Service and Byggmax Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if COOR Service 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 COOR Service Management 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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.