Correlation Between Bodyflight Sweden and BuzzFeed

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

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

Diversification Opportunities for Bodyflight Sweden and BuzzFeed

0.05

Correlation Coefficient

Bodyflight Sweden  BuzzFeed

Significant diversification

The 3 months correlation between Bodyflight and BuzzFeed is 0.05. Overlapping area represents the amount of risk that can be diversified away by holding Bodyflight Sweden AB and BuzzFeed in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BuzzFeed and Bodyflight Sweden 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 Bodyflight Sweden AB are associated (or correlated) with BuzzFeed. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BuzzFeed has no effect on the direction of Bodyflight Sweden i.e., Bodyflight Sweden and BuzzFeed go up and down completely randomly.

Pair Corralation between Bodyflight Sweden and BuzzFeed

If you would invest  40.00  in BuzzFeed on January 26, 2024 and sell it today you would earn a total of  0.00  from holding BuzzFeed or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	4.76%
Values	Daily Returns

Bodyflight Sweden AB  vs.  BuzzFeed

Bodyflight Sweden

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Bodyflight Sweden AB has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of weak performance in the last few months, the Stock's fundamental indicators remain fairly strong which may send shares a bit higher in May 2024. The current disturbance may also be a sign of long term up-swing for the company investors.

BuzzFeed

Risk-Adjusted Performance

11 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in BuzzFeed are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. In spite of rather uncertain technical and fundamental indicators, BuzzFeed exhibited solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Bodyflight Sweden and BuzzFeed

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

The idea behind Bodyflight Sweden AB and BuzzFeed 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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.