Correlation Between BankIn Bredygt and Alefarm Brewing

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

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

Diversification Opportunities for BankIn Bredygt and Alefarm Brewing

0.18

Correlation Coefficient

BankIn Bredygt  Alefarm Brewing

Average diversification

The 3 months correlation between BankIn and Alefarm is 0.18. Overlapping area represents the amount of risk that can be diversified away by holding BankIn Bredygt Klimaakt and Alefarm Brewing AS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Alefarm Brewing AS and BankIn Bredygt 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 BankIn Bredygt Klimaakt are associated (or correlated) with Alefarm Brewing. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Alefarm Brewing AS has no effect on the direction of BankIn Bredygt i.e., BankIn Bredygt and Alefarm Brewing go up and down completely randomly.

Pair Corralation between BankIn Bredygt and Alefarm Brewing

Assuming the 90 days trading horizon BankIn Bredygt Klimaakt is expected to generate 0.29 times more return on investment than Alefarm Brewing. However, BankIn Bredygt Klimaakt is 3.41 times less risky than Alefarm Brewing. It trades about 0.17 of its potential returns per unit of risk. Alefarm Brewing AS is currently generating about 0.0 per unit of risk. If you would invest  9,874  in BankIn Bredygt Klimaakt on September 1, 2024 and sell it today you would earn a total of  891.00  from holding BankIn Bredygt Klimaakt or generate 9.02% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	69.23%
Values	Daily Returns

BankIn Bredygt Klimaakt  vs.  Alefarm Brewing AS

BankIn Bredygt Klimaakt

Risk-Adjusted Performance

13 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in BankIn Bredygt Klimaakt are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak forward indicators, BankIn Bredygt may actually be approaching a critical reversion point that can send shares even higher in December 2024.

Alefarm Brewing AS

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Alefarm Brewing AS has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong technical and fundamental indicators, Alefarm Brewing is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with BankIn Bredygt and Alefarm Brewing

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

The idea behind BankIn Bredygt Klimaakt and Alefarm Brewing AS 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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.