Correlation Between Desenio Group and BHG Group

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

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

Diversification Opportunities for Desenio Group and BHG Group

-0.71

Correlation Coefficient

Desenio Group  BHG Group

Pay attention - limited upside

The 3 months correlation between Desenio and BHG is -0.71. Overlapping area represents the amount of risk that can be diversified away by holding Desenio Group AB and BHG Group AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BHG Group AB and Desenio 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 Desenio Group AB are associated (or correlated) with BHG Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BHG Group AB has no effect on the direction of Desenio Group i.e., Desenio Group and BHG Group go up and down completely randomly.

Pair Corralation between Desenio Group and BHG Group

Assuming the 90 days trading horizon Desenio Group AB is expected to under-perform the BHG Group. In addition to that, Desenio Group is 2.28 times more volatile than BHG Group AB. It trades about -0.14 of its total potential returns per unit of risk. BHG Group AB is currently generating about 0.12 per unit of volatility. If you would invest  1,759  in BHG Group AB on September 23, 2024 and sell it today you would earn a total of  129.00  from holding BHG Group AB or generate 7.33% return on investment over 90 days.

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

Desenio Group AB  vs.  BHG Group AB

Desenio Group AB

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Desenio Group 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 January 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

BHG Group AB

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in BHG Group AB are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain technical and fundamental indicators, BHG Group unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Desenio Group and BHG Group

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

The idea behind Desenio Group AB and BHG 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 Portfolio Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.