Correlation Between Sivers IMA and Bambuser

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

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

Diversification Opportunities for Sivers IMA and Bambuser

0.88

Correlation Coefficient

Sivers IMA  Bambuser

Very poor diversification

The 3 months correlation between Sivers and Bambuser is 0.88. Overlapping area represents the amount of risk that can be diversified away by holding Sivers IMA Holding and Bambuser AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bambuser AB and Sivers IMA 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 Sivers IMA Holding are associated (or correlated) with Bambuser. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bambuser AB has no effect on the direction of Sivers IMA i.e., Sivers IMA and Bambuser go up and down completely randomly.

Pair Corralation between Sivers IMA and Bambuser

Assuming the 90 days trading horizon Sivers IMA Holding is expected to under-perform the Bambuser. In addition to that, Sivers IMA is 1.24 times more volatile than Bambuser AB. It trades about -0.13 of its total potential returns per unit of risk. Bambuser AB is currently generating about -0.09 per unit of volatility. If you would invest  90.00  in Bambuser AB on September 4, 2024 and sell it today you would lose (31.00) from holding Bambuser AB or give up 34.44% of portfolio value over 90 days.

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

Sivers IMA Holding  vs.  Bambuser AB

Sivers IMA Holding

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Sivers IMA Holding 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.

Bambuser AB

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Bambuser 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.

Pair Trading with Sivers IMA and Bambuser

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

The idea behind Sivers IMA Holding and Bambuser 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 Transaction History module to view history of all your transactions and understand their impact on performance.