Correlation Between Sandvik AB and Berkshire Grey

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

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

Diversification Opportunities for Sandvik AB and Berkshire Grey

-0.38

Correlation Coefficient

Sandvik AB  Berkshire Grey

Very good diversification

The 3 months correlation between Sandvik and Berkshire is -0.38. Overlapping area represents the amount of risk that can be diversified away by holding Sandvik AB ADR and Berkshire Grey in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Berkshire Grey and Sandvik AB 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 Sandvik AB ADR are associated (or correlated) with Berkshire Grey. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Berkshire Grey has no effect on the direction of Sandvik AB i.e., Sandvik AB and Berkshire Grey go up and down completely randomly.

Pair Corralation between Sandvik AB and Berkshire Grey

If you would invest  140.00  in Berkshire Grey on September 3, 2024 and sell it today you would earn a total of  0.00  from holding Berkshire Grey or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	1.56%
Values	Daily Returns

Sandvik AB ADR  vs.  Berkshire Grey

Sandvik AB ADR

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Sandvik AB ADR has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest weak performance, the Stock's forward-looking signals remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the company investors.

Berkshire Grey

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Berkshire Grey has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly strong basic indicators, Berkshire Grey is not utilizing all of its potentials. The newest stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Sandvik AB and Berkshire Grey

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

The idea behind Sandvik AB ADR and Berkshire Grey 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 Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.