Correlation Between Boozt AB and Clas Ohlson

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

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

Diversification Opportunities for Boozt AB and Clas Ohlson

0.22

Correlation Coefficient

Boozt AB  Clas Ohlson

Modest diversification

The 3 months correlation between Boozt and Clas is 0.22. Overlapping area represents the amount of risk that can be diversified away by holding Boozt AB and Clas Ohlson AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Clas Ohlson AB and Boozt AB 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 Boozt AB are associated (or correlated) with Clas Ohlson. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Clas Ohlson AB has no effect on the direction of Boozt AB i.e., Boozt AB and Clas Ohlson go up and down completely randomly.

Pair Corralation between Boozt AB and Clas Ohlson

Assuming the 90 days trading horizon Boozt AB is expected to generate 1.39 times less return on investment than Clas Ohlson. In addition to that, Boozt AB is 1.59 times more volatile than Clas Ohlson AB. It trades about 0.14 of its total potential returns per unit of risk. Clas Ohlson AB is currently generating about 0.31 per unit of volatility. If you would invest  15,770  in Clas Ohlson AB on September 12, 2024 and sell it today you would earn a total of  6,410  from holding Clas Ohlson AB or generate 40.65% return on investment over 90 days.

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

Boozt AB  vs.  Clas Ohlson AB

Boozt AB

Risk-Adjusted Performance

11 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Boozt AB are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, Boozt AB unveiled solid returns over the last few months and may actually be approaching a breakup point.

Clas Ohlson AB

Risk-Adjusted Performance

24 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Clas Ohlson AB are ranked lower than 24 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Clas Ohlson sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Boozt AB and Clas Ohlson

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

The idea behind Boozt AB and Clas Ohlson 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 Money Managers module to screen money managers from public funds and ETFs managed around the world.