Correlation Between Indutrade and Beijer Alma

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

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

Diversification Opportunities for Indutrade and Beijer Alma

-0.36

Correlation Coefficient

Indutrade  Beijer Alma

Very good diversification

The 3 months correlation between Indutrade and Beijer is -0.36. Overlapping area represents the amount of risk that can be diversified away by holding Indutrade AB and Beijer Alma AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Beijer Alma AB and Indutrade 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 Indutrade AB are associated (or correlated) with Beijer Alma. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Beijer Alma AB has no effect on the direction of Indutrade i.e., Indutrade and Beijer Alma go up and down completely randomly.

Pair Corralation between Indutrade and Beijer Alma

Assuming the 90 days trading horizon Indutrade AB is expected to under-perform the Beijer Alma. But the stock apears to be less risky and, when comparing its historical volatility, Indutrade AB is 1.39 times less risky than Beijer Alma. The stock trades about -0.05 of its potential returns per unit of risk. The Beijer Alma AB is currently generating about 0.26 of returns per unit of risk over similar time horizon. If you would invest  19,118  in Beijer Alma AB on April 25, 2025 and sell it today you would earn a total of  7,382  from holding Beijer Alma AB or generate 38.61% return on investment over 90 days.

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

Indutrade AB  vs.  Beijer Alma AB

Indutrade AB

Risk-Adjusted Performance

Very Weak

Over the last 90 days Indutrade AB has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, Indutrade is not utilizing all of its potentials. The current stock price uproar, may contribute to short-horizon losses for the private investors.

Beijer Alma AB

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Beijer Alma AB are ranked lower than 20 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak forward indicators, Beijer Alma sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Indutrade and Beijer Alma

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

The idea behind Indutrade AB and Beijer Alma 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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.