Correlation Between BHG Group and Sinch AB
Can any of the company-specific risk be diversified away by investing in both BHG Group and Sinch 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 BHG Group and Sinch AB into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between BHG Group AB and Sinch AB, you can compare the effects of market volatilities on BHG Group and Sinch 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 BHG Group with a short position of Sinch AB. Check out your portfolio center. Please also check ongoing floating volatility patterns of BHG Group and Sinch AB.
Diversification Opportunities for BHG Group and Sinch AB
Excellent diversification
The 3 months correlation between BHG and Sinch is -0.54. Overlapping area represents the amount of risk that can be diversified away by holding BHG Group AB and Sinch AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sinch AB and BHG Group 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 BHG Group AB are associated (or correlated) with Sinch AB. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sinch AB has no effect on the direction of BHG Group i.e., BHG Group and Sinch AB go up and down completely randomly.
Pair Corralation between BHG Group and Sinch AB
Assuming the 90 days trading horizon BHG Group AB is expected to generate 1.06 times more return on investment than Sinch AB. However, BHG Group is 1.06 times more volatile than Sinch AB. It trades about 0.02 of its potential returns per unit of risk. Sinch AB is currently generating about -0.03 per unit of risk. If you would invest 2,268 in BHG Group AB on September 6, 2024 and sell it today you would lose (202.00) from holding BHG Group AB or give up 8.91% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Very Weak |
Accuracy | 100.0% |
Values | Daily Returns |
BHG Group AB vs. Sinch AB
Performance |
Timeline |
BHG Group AB |
Sinch AB |
BHG Group and Sinch AB Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with BHG Group and Sinch AB
The main advantage of trading using opposite BHG Group and Sinch AB positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BHG Group position performs unexpectedly, Sinch 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 Sinch AB will offset losses from the drop in Sinch AB's long position.BHG Group vs. Sinch AB | BHG Group vs. Byggmax Group AB | BHG Group vs. Stillfront Group AB | BHG Group vs. Boozt AB |
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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 Portfolio File Import module to quickly import all of your third-party portfolios from your local drive in csv format.
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