Correlation Between Absolent Group and VNV Global
Can any of the company-specific risk be diversified away by investing in both Absolent Group and VNV Global 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 Absolent Group and VNV Global into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Absolent Group AB and VNV Global AB, you can compare the effects of market volatilities on Absolent Group and VNV Global 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 Absolent Group with a short position of VNV Global. Check out your portfolio center. Please also check ongoing floating volatility patterns of Absolent Group and VNV Global.
Diversification Opportunities for Absolent Group and VNV Global
0.64 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Absolent and VNV is 0.64. Overlapping area represents the amount of risk that can be diversified away by holding Absolent Group AB and VNV Global AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on VNV Global AB and Absolent 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 Absolent Group AB are associated (or correlated) with VNV Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of VNV Global AB has no effect on the direction of Absolent Group i.e., Absolent Group and VNV Global go up and down completely randomly.
Pair Corralation between Absolent Group and VNV Global
Assuming the 90 days trading horizon Absolent Group AB is expected to under-perform the VNV Global. But the stock apears to be less risky and, when comparing its historical volatility, Absolent Group AB is 1.57 times less risky than VNV Global. The stock trades about -0.8 of its potential returns per unit of risk. The VNV Global AB is currently generating about -0.12 of returns per unit of risk over similar time horizon. If you would invest 2,068 in VNV Global AB on August 29, 2024 and sell it today you would lose (159.00) from holding VNV Global AB or give up 7.69% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Absolent Group AB vs. VNV Global AB
Performance |
| Timeline |
| Absolent Group AB |
| VNV Global AB |
Absolent Group and VNV Global Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Absolent Group and VNV Global
The main advantage of trading using opposite Absolent Group and VNV Global positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Absolent Group position performs unexpectedly, VNV Global 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 VNV Global will offset losses from the drop in VNV Global's long position.| Absolent Group vs. AQ Group AB | Absolent Group vs. Troax Group AB | Absolent Group vs. Bufab Holding AB | Absolent Group vs. Beijer Ref AB |
| VNV Global vs. Norva24 Group AB | VNV Global vs. KABE Group AB | VNV Global vs. IAR Systems Group | VNV Global vs. Clinical Laserthermia Systems |
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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .
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