Correlation Between AcadeMedia and Ferronordic
Can any of the company-specific risk be diversified away by investing in both AcadeMedia and Ferronordic 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 AcadeMedia and Ferronordic into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between AcadeMedia AB and Ferronordic AB, you can compare the effects of market volatilities on AcadeMedia and Ferronordic 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 AcadeMedia with a short position of Ferronordic. Check out your portfolio center. Please also check ongoing floating volatility patterns of AcadeMedia and Ferronordic.
Diversification Opportunities for AcadeMedia and Ferronordic
0.38 | Correlation Coefficient |
Weak diversification
The 3 months correlation between AcadeMedia and Ferronordic is 0.38. Overlapping area represents the amount of risk that can be diversified away by holding AcadeMedia AB and Ferronordic AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ferronordic AB and AcadeMedia 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 AcadeMedia AB are associated (or correlated) with Ferronordic. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ferronordic AB has no effect on the direction of AcadeMedia i.e., AcadeMedia and Ferronordic go up and down completely randomly.
Pair Corralation between AcadeMedia and Ferronordic
Assuming the 90 days trading horizon AcadeMedia AB is expected to generate 0.9 times more return on investment than Ferronordic. However, AcadeMedia AB is 1.11 times less risky than Ferronordic. It trades about 0.26 of its potential returns per unit of risk. Ferronordic AB is currently generating about -0.12 per unit of risk. If you would invest 6,129 in AcadeMedia AB on September 15, 2024 and sell it today you would earn a total of 481.00 from holding AcadeMedia AB or generate 7.85% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
AcadeMedia AB vs. Ferronordic AB
Performance |
| Timeline |
| AcadeMedia AB |
| Ferronordic AB |
AcadeMedia and Ferronordic Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with AcadeMedia and Ferronordic
The main advantage of trading using opposite AcadeMedia and Ferronordic positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AcadeMedia position performs unexpectedly, Ferronordic 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 Ferronordic will offset losses from the drop in Ferronordic's long position.| AcadeMedia vs. Inwido AB | AcadeMedia vs. Alimak Hek Group | AcadeMedia vs. Dometic Group AB | AcadeMedia vs. Byggmax Group AB |
| Ferronordic vs. Beowulf Mining PLC | Ferronordic vs. AcadeMedia AB | Ferronordic vs. Vitec Software Group | Ferronordic vs. Media and Games |
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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.
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