Correlation Between Alphabet and Bodyflight Sweden

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

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

Diversification Opportunities for Alphabet and Bodyflight Sweden

-0.09

Correlation Coefficient

Alphabet  Bodyflight Sweden

Good diversification

The 3 months correlation between Alphabet and Bodyflight is -0.09. Overlapping area represents the amount of risk that can be diversified away by holding Alphabet Inc Class A and Bodyflight Sweden AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bodyflight Sweden and Alphabet 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 Alphabet Inc Class A are associated (or correlated) with Bodyflight Sweden. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bodyflight Sweden has no effect on the direction of Alphabet i.e., Alphabet and Bodyflight Sweden go up and down completely randomly.

Pair Corralation between Alphabet and Bodyflight Sweden

If you would invest  13,767  in Alphabet Inc Class A on February 8, 2024 and sell it today you would earn a total of  3,358  from holding Alphabet Inc Class A or generate 24.39% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	2.38%
Values	Daily Returns

Alphabet Inc Class A  vs.  Bodyflight Sweden AB

Alphabet Class A

Risk-Adjusted Performance

10 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Alphabet Inc Class A are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. Despite quite fragile technical and fundamental indicators, Alphabet disclosed solid returns over the last few months and may actually be approaching a breakup point.

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 June 2024. The current disturbance may also be a sign of long term up-swing for the company investors.

Pair Trading with Alphabet and Bodyflight Sweden

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

The idea behind Alphabet Inc Class A and Bodyflight Sweden 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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.