Correlation Between Autoliv and Byggmstare Anders

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

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

Diversification Opportunities for Autoliv and Byggmstare Anders

0.89

Correlation Coefficient

Autoliv  Byggmstare Anders

Very poor diversification

The 3 months correlation between Autoliv and Byggmstare is 0.89. Overlapping area represents the amount of risk that can be diversified away by holding Autoliv and Byggmstare Anders J in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Byggmstare Anders and Autoliv 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 Autoliv are associated (or correlated) with Byggmstare Anders. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Byggmstare Anders has no effect on the direction of Autoliv i.e., Autoliv and Byggmstare Anders go up and down completely randomly.

Pair Corralation between Autoliv and Byggmstare Anders

Assuming the 90 days trading horizon Autoliv is expected to generate 0.72 times more return on investment than Byggmstare Anders. However, Autoliv is 1.38 times less risky than Byggmstare Anders. It trades about 0.31 of its potential returns per unit of risk. Byggmstare Anders J is currently generating about 0.12 per unit of risk. If you would invest  82,380  in Autoliv on April 21, 2025 and sell it today you would earn a total of  26,520  from holding Autoliv or generate 32.19% return on investment over 90 days.

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

Autoliv  vs.  Byggmstare Anders J

Autoliv

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Autoliv are ranked lower than 24 (%) of all global equities and portfolios over the last 90 days. In spite of rather uncertain basic indicators, Autoliv exhibited solid returns over the last few months and may actually be approaching a breakup point.

Byggmstare Anders

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Byggmstare Anders J are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, Byggmstare Anders unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Autoliv and Byggmstare Anders

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

The idea behind Autoliv and Byggmstare Anders J 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 Portfolio Anywhere module to track or share privately all of your investments from the convenience of any device.