Correlation Between Zaptec AS and Bambuser

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

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

Diversification Opportunities for Zaptec AS and Bambuser

-0.45

Correlation Coefficient

Zaptec AS  Bambuser

Very good diversification

The 3 months correlation between Zaptec and Bambuser is -0.45. Overlapping area represents the amount of risk that can be diversified away by holding Zaptec AS and Bambuser AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bambuser AB and Zaptec AS 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 Zaptec AS 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 Zaptec AS i.e., Zaptec AS and Bambuser go up and down completely randomly.

Pair Corralation between Zaptec AS and Bambuser

Assuming the 90 days trading horizon Zaptec AS is expected to generate 0.88 times more return on investment than Bambuser. However, Zaptec AS is 1.14 times less risky than Bambuser. It trades about 0.15 of its potential returns per unit of risk. Bambuser AB is currently generating about 0.02 per unit of risk. If you would invest  1,120  in Zaptec AS on December 31, 2024 and sell it today you would earn a total of  611.00  from holding Zaptec AS or generate 54.55% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	98.41%
Values	Daily Returns

Zaptec AS  vs.  Bambuser AB

Zaptec AS

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Zaptec AS are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. Despite quite weak basic indicators, Zaptec AS disclosed solid returns over the last few months and may actually be approaching a breakup point.

Bambuser AB

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Bambuser AB are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable basic indicators, Bambuser is not utilizing all of its potentials. The newest stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with Zaptec AS and Bambuser

The main advantage of trading using opposite Zaptec AS and Bambuser positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Zaptec AS 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 Zaptec AS 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.

Check out your portfolio center.

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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.