Correlation Between Nederman Holding and Bergman Beving

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

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

Diversification Opportunities for Nederman Holding and Bergman Beving

0.69

Correlation Coefficient

Nederman Holding  Bergman Beving

Poor diversification

The 3 months correlation between Nederman and Bergman is 0.69. Overlapping area represents the amount of risk that can be diversified away by holding Nederman Holding AB and Bergman Beving AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bergman Beving AB and Nederman Holding 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 Nederman Holding AB are associated (or correlated) with Bergman Beving. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bergman Beving AB has no effect on the direction of Nederman Holding i.e., Nederman Holding and Bergman Beving go up and down completely randomly.

Pair Corralation between Nederman Holding and Bergman Beving

Assuming the 90 days trading horizon Nederman Holding AB is expected to generate 1.03 times more return on investment than Bergman Beving. However, Nederman Holding is 1.03 times more volatile than Bergman Beving AB. It trades about 0.04 of its potential returns per unit of risk. Bergman Beving AB is currently generating about 0.02 per unit of risk. If you would invest  20,850  in Nederman Holding AB on September 13, 2024 and sell it today you would earn a total of  900.00  from holding Nederman Holding AB or generate 4.32% return on investment over 90 days.

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

Nederman Holding AB  vs.  Bergman Beving AB

Nederman Holding

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Nederman Holding AB are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable basic indicators, Nederman Holding is not utilizing all of its potentials. The newest stock price uproar, may contribute to short-horizon losses for the private investors.

Bergman Beving AB

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Bergman Beving AB are ranked lower than 1 (%) 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 current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Nederman Holding and Bergman Beving

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

The idea behind Nederman Holding AB and Bergman Beving 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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.