Correlation Between BoMill AB and Cavotec SA

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

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

Diversification Opportunities for BoMill AB and Cavotec SA

0.0

Correlation Coefficient

BoMill AB  Cavotec SA

Pay attention - limited upside

The 3 months correlation between BoMill and Cavotec is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding BoMill AB and Cavotec SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cavotec SA and BoMill 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 BoMill AB are associated (or correlated) with Cavotec SA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cavotec SA has no effect on the direction of BoMill AB i.e., BoMill AB and Cavotec SA go up and down completely randomly.

Pair Corralation between BoMill AB and Cavotec SA

If you would invest  1,575  in Cavotec SA on April 24, 2025 and sell it today you would earn a total of  245.00  from holding Cavotec SA or generate 15.56% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

BoMill AB  vs.  Cavotec SA

BoMill AB

Risk-Adjusted Performance

Very Weak

Over the last 90 days BoMill AB has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong primary indicators, BoMill AB is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Cavotec SA

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Cavotec SA are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively weak fundamental indicators, Cavotec SA unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with BoMill AB and Cavotec SA

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

The idea behind BoMill AB and Cavotec SA 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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.