Correlation Between Industrivarden and Bure Equity

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

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

Diversification Opportunities for Industrivarden and Bure Equity

0.03

Correlation Coefficient

Industrivarden  Bure Equity

Significant diversification

The 3 months correlation between Industrivarden and Bure is 0.03. Overlapping area represents the amount of risk that can be diversified away by holding Industrivarden AB ser and Bure Equity AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bure Equity AB and Industrivarden 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 Industrivarden AB ser are associated (or correlated) with Bure Equity. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bure Equity AB has no effect on the direction of Industrivarden i.e., Industrivarden and Bure Equity go up and down completely randomly.

Pair Corralation between Industrivarden and Bure Equity

Assuming the 90 days trading horizon Industrivarden AB ser is expected to generate 1.15 times more return on investment than Bure Equity. However, Industrivarden is 1.15 times more volatile than Bure Equity AB. It trades about 0.29 of its potential returns per unit of risk. Bure Equity AB is currently generating about 0.24 per unit of risk. If you would invest  34,180  in Industrivarden AB ser on April 25, 2025 and sell it today you would earn a total of  2,700  from holding Industrivarden AB ser or generate 7.9% return on investment over 90 days.

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

Industrivarden AB ser  vs.  Bure Equity AB

Industrivarden AB ser

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Industrivarden AB ser are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak fundamental indicators, Industrivarden may actually be approaching a critical reversion point that can send shares even higher in August 2025.

Bure Equity AB

Risk-Adjusted Performance

Very Weak

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

Pair Trading with Industrivarden and Bure Equity

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

The idea behind Industrivarden AB ser and Bure Equity 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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.