Correlation Between Industrivarden and One Media
Can any of the company-specific risk be diversified away by investing in both Industrivarden and One Media 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 One Media 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 One Media iP, you can compare the effects of market volatilities on Industrivarden and One Media 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 One Media. Check out your portfolio center. Please also check ongoing floating volatility patterns of Industrivarden and One Media.
Diversification Opportunities for Industrivarden and One Media
-0.12 | Correlation Coefficient |
Good diversification
The 3 months correlation between Industrivarden and One is -0.12. Overlapping area represents the amount of risk that can be diversified away by holding Industrivarden AB ser and One Media iP in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on One Media iP 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 One Media. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of One Media iP has no effect on the direction of Industrivarden i.e., Industrivarden and One Media go up and down completely randomly.
Pair Corralation between Industrivarden and One Media
Assuming the 90 days trading horizon Industrivarden AB ser is expected to generate 1.79 times more return on investment than One Media. However, Industrivarden is 1.79 times more volatile than One Media iP. It trades about 0.42 of its potential returns per unit of risk. One Media iP is currently generating about 0.24 per unit of risk. If you would invest 34,550 in Industrivarden AB ser on October 23, 2024 and sell it today you would earn a total of 2,730 from holding Industrivarden AB ser or generate 7.9% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Industrivarden AB ser vs. One Media iP
Performance |
| Timeline |
| Industrivarden AB ser |
| One Media iP |
Industrivarden and One Media Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Industrivarden and One Media
The main advantage of trading using opposite Industrivarden and One Media positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Industrivarden position performs unexpectedly, One Media 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 One Media will offset losses from the drop in One Media's long position.| Industrivarden vs. One Media iP | Industrivarden vs. Liberty Media Corp | Industrivarden vs. LBG Media PLC | Industrivarden vs. STMicroelectronics NV |
| One Media vs. Optima Health plc | One Media vs. Naturhouse Health SA | One Media vs. URU Metals | One Media vs. Europa Metals |
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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.
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