Correlation Between Bergman Beving and Teqnion AB

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

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

Diversification Opportunities for Bergman Beving and Teqnion AB

0.65

Correlation Coefficient

Bergman Beving  Teqnion AB

Poor diversification

The 3 months correlation between Bergman and Teqnion is 0.65. Overlapping area represents the amount of risk that can be diversified away by holding Bergman Beving AB and Teqnion AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Teqnion AB and Bergman Beving 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 Bergman Beving AB are associated (or correlated) with Teqnion AB. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Teqnion AB has no effect on the direction of Bergman Beving i.e., Bergman Beving and Teqnion AB go up and down completely randomly.

Pair Corralation between Bergman Beving and Teqnion AB

Assuming the 90 days trading horizon Bergman Beving AB is expected to generate 2.12 times more return on investment than Teqnion AB. However, Bergman Beving is 2.12 times more volatile than Teqnion AB. It trades about 0.03 of its potential returns per unit of risk. Teqnion AB is currently generating about -0.21 per unit of risk. If you would invest  28,950  in Bergman Beving AB on September 16, 2024 and sell it today you would earn a total of  650.00  from holding Bergman Beving AB or generate 2.25% return on investment over 90 days.

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

Bergman Beving AB  vs.  Teqnion AB

Bergman Beving AB

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Bergman Beving AB are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong basic indicators, Bergman Beving is not utilizing all of its potentials. The newest stock price disturbance, may contribute to short-term losses for the investors.

Teqnion AB

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Teqnion AB has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of weak 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 Bergman Beving and Teqnion AB

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

The idea behind Bergman Beving AB and Teqnion 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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.