Correlation Between Bjorn Borg and EWork Group

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

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

Diversification Opportunities for Bjorn Borg and EWork Group

0.44

Correlation Coefficient

Bjorn Borg  EWork Group

Very weak diversification

The 3 months correlation between Bjorn and EWork is 0.44. Overlapping area represents the amount of risk that can be diversified away by holding Bjorn Borg AB and eWork Group AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on eWork Group AB and Bjorn Borg 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 Bjorn Borg AB are associated (or correlated) with EWork Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of eWork Group AB has no effect on the direction of Bjorn Borg i.e., Bjorn Borg and EWork Group go up and down completely randomly.

Pair Corralation between Bjorn Borg and EWork Group

Assuming the 90 days trading horizon Bjorn Borg AB is expected to under-perform the EWork Group. In addition to that, Bjorn Borg is 1.6 times more volatile than eWork Group AB. It trades about -0.1 of its total potential returns per unit of risk. eWork Group AB is currently generating about -0.01 per unit of volatility. If you would invest  13,940  in eWork Group AB on September 13, 2024 and sell it today you would lose (220.00) from holding eWork Group AB or give up 1.58% of portfolio value over 90 days.

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

Bjorn Borg AB  vs.  eWork Group AB

Bjorn Borg AB

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Bjorn Borg AB has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest weak performance, the Stock's basic indicators remain stable and the newest uproar on Wall Street may also be a sign of mid-term gains for the firm private investors.

eWork Group AB

Risk-Adjusted Performance

0 of 100

Weak

Over the last 90 days eWork Group AB has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, EWork Group 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 Bjorn Borg and EWork Group

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

The idea behind Bjorn Borg AB and eWork Group 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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.