Correlation Between 4C Group and Sileon AB
Can any of the company-specific risk be diversified away by investing in both 4C Group and Sileon AB 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 4C Group and Sileon AB into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between 4C Group AB and Sileon AB, you can compare the effects of market volatilities on 4C Group and Sileon AB 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 4C Group with a short position of Sileon AB. Check out your portfolio center. Please also check ongoing floating volatility patterns of 4C Group and Sileon AB.
Diversification Opportunities for 4C Group and Sileon AB
Very weak diversification
The 3 months correlation between 4C Group and Sileon is 0.4. Overlapping area represents the amount of risk that can be diversified away by holding 4C Group AB and Sileon AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sileon AB and 4C Group 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 4C Group AB are associated (or correlated) with Sileon AB. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sileon AB has no effect on the direction of 4C Group i.e., 4C Group and Sileon AB go up and down completely randomly.
Pair Corralation between 4C Group and Sileon AB
Assuming the 90 days horizon 4C Group AB is expected to generate 0.59 times more return on investment than Sileon AB. However, 4C Group AB is 1.7 times less risky than Sileon AB. It trades about -0.05 of its potential returns per unit of risk. Sileon AB is currently generating about -0.08 per unit of risk. If you would invest 3,798 in 4C Group AB on October 12, 2024 and sell it today you would lose (2,763) from holding 4C Group AB or give up 72.75% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
4C Group AB vs. Sileon AB
Performance |
| Timeline |
| 4C Group AB |
| Sileon AB |
4C Group and Sileon AB Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with 4C Group and Sileon AB
The main advantage of trading using opposite 4C Group and Sileon AB positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if 4C Group position performs unexpectedly, Sileon AB 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 Sileon AB will offset losses from the drop in Sileon AB's long position.| 4C Group vs. B3 Consulting Group | 4C Group vs. Sleep Cycle AB | 4C Group vs. Avensia publ AB | 4C Group vs. CAG Group AB |
| Sileon AB vs. Invisio Communications AB | Sileon AB vs. Online Brands Nordic | Sileon AB vs. Redsense Medical AB | Sileon AB vs. Axfood AB |
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 Portfolio Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
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