Correlation Between Aedas Homes and TELLUSGRUPPEN
Can any of the company-specific risk be diversified away by investing in both Aedas Homes and TELLUSGRUPPEN 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 Aedas Homes and TELLUSGRUPPEN into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Aedas Homes SA and TELLUSGRUPPEN AB, you can compare the effects of market volatilities on Aedas Homes and TELLUSGRUPPEN 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 Aedas Homes with a short position of TELLUSGRUPPEN. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aedas Homes and TELLUSGRUPPEN.
Diversification Opportunities for Aedas Homes and TELLUSGRUPPEN
0.28 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Aedas and TELLUSGRUPPEN is 0.28. Overlapping area represents the amount of risk that can be diversified away by holding Aedas Homes SA and TELLUSGRUPPEN AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on TELLUSGRUPPEN AB and Aedas Homes 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 Aedas Homes SA are associated (or correlated) with TELLUSGRUPPEN. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of TELLUSGRUPPEN AB has no effect on the direction of Aedas Homes i.e., Aedas Homes and TELLUSGRUPPEN go up and down completely randomly.
Pair Corralation between Aedas Homes and TELLUSGRUPPEN
Assuming the 90 days horizon Aedas Homes SA is expected to generate 0.36 times more return on investment than TELLUSGRUPPEN. However, Aedas Homes SA is 2.77 times less risky than TELLUSGRUPPEN. It trades about 0.0 of its potential returns per unit of risk. TELLUSGRUPPEN AB is currently generating about -0.3 per unit of risk. If you would invest 2,535 in Aedas Homes SA on September 13, 2024 and sell it today you would lose (5.00) from holding Aedas Homes SA or give up 0.2% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Aedas Homes SA vs. TELLUSGRUPPEN AB
Performance |
| Timeline |
| Aedas Homes SA |
| TELLUSGRUPPEN AB |
Aedas Homes and TELLUSGRUPPEN Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Aedas Homes and TELLUSGRUPPEN
The main advantage of trading using opposite Aedas Homes and TELLUSGRUPPEN positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aedas Homes position performs unexpectedly, TELLUSGRUPPEN 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 TELLUSGRUPPEN will offset losses from the drop in TELLUSGRUPPEN's long position.| Aedas Homes vs. Global Ship Lease | Aedas Homes vs. BOS BETTER ONLINE | Aedas Homes vs. SALESFORCE INC CDR | Aedas Homes vs. AIR PRODCHEMICALS |
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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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.
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