Correlation Between Albion Technology and Industrivarden
Can any of the company-specific risk be diversified away by investing in both Albion Technology and Industrivarden 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 Albion Technology and Industrivarden into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Albion Technology General and Industrivarden AB ser, you can compare the effects of market volatilities on Albion Technology and Industrivarden 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 Albion Technology with a short position of Industrivarden. Check out your portfolio center. Please also check ongoing floating volatility patterns of Albion Technology and Industrivarden.
Diversification Opportunities for Albion Technology and Industrivarden
-0.1 | Correlation Coefficient |
Good diversification
The 3 months correlation between Albion and Industrivarden is -0.1. Overlapping area represents the amount of risk that can be diversified away by holding Albion Technology General and Industrivarden AB ser in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Industrivarden AB ser and Albion Technology 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 Albion Technology General are associated (or correlated) with Industrivarden. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Industrivarden AB ser has no effect on the direction of Albion Technology i.e., Albion Technology and Industrivarden go up and down completely randomly.
Pair Corralation between Albion Technology and Industrivarden
Assuming the 90 days trading horizon Albion Technology General is expected to generate 1.32 times more return on investment than Industrivarden. However, Albion Technology is 1.32 times more volatile than Industrivarden AB ser. It trades about -0.04 of its potential returns per unit of risk. Industrivarden AB ser is currently generating about -0.2 per unit of risk. If you would invest 6,962 in Albion Technology General on August 29, 2024 and sell it today you would lose (112.00) from holding Albion Technology General or give up 1.61% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Albion Technology General vs. Industrivarden AB ser
Performance |
| Timeline |
| Albion Technology General |
| Industrivarden AB ser |
Albion Technology and Industrivarden Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Albion Technology and Industrivarden
The main advantage of trading using opposite Albion Technology and Industrivarden positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Albion Technology position performs unexpectedly, Industrivarden 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 Industrivarden will offset losses from the drop in Industrivarden's long position.| Albion Technology vs. Toyota Motor Corp | Albion Technology vs. Lendinvest PLC | Albion Technology vs. Neometals | Albion Technology vs. Coor Service Management |
| Industrivarden vs. Lendinvest PLC | Industrivarden vs. Neometals | Industrivarden vs. Coor Service Management | Industrivarden vs. Albion Technology General |
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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..
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