Correlation Between High Coast and Bergman Beving

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

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

Diversification Opportunities for High Coast and Bergman Beving

-0.33

Correlation Coefficient

High Coast  Bergman Beving

Very good diversification

The 3 months correlation between High and Bergman is -0.33. Overlapping area represents the amount of risk that can be diversified away by holding High Coast Distillery and Bergman Beving AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bergman Beving AB and High Coast 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 High Coast Distillery are associated (or correlated) with Bergman Beving. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bergman Beving AB has no effect on the direction of High Coast i.e., High Coast and Bergman Beving go up and down completely randomly.

Pair Corralation between High Coast and Bergman Beving

Assuming the 90 days trading horizon High Coast Distillery is expected to generate 1.78 times more return on investment than Bergman Beving. However, High Coast is 1.78 times more volatile than Bergman Beving AB. It trades about 0.03 of its potential returns per unit of risk. Bergman Beving AB is currently generating about -0.08 per unit of risk. If you would invest  4,320  in High Coast Distillery on October 17, 2024 and sell it today you would earn a total of  20.00  from holding High Coast Distillery or generate 0.46% return on investment over 90 days.

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

High Coast Distillery  vs.  Bergman Beving AB

High Coast Distillery

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in High Coast Distillery are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Despite somewhat uncertain fundamental indicators, High Coast may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Bergman Beving AB

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Bergman Beving AB has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest weak performance, the Stock's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the company investors.

Pair Trading with High Coast and Bergman Beving

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

The idea behind High Coast Distillery and Bergman Beving 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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.