Correlation Between Addtech AB and AQ Group
Can any of the company-specific risk be diversified away by investing in both Addtech AB and AQ Group 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 Addtech AB and AQ Group into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Addtech AB and AQ Group AB, you can compare the effects of market volatilities on Addtech AB and AQ Group 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 Addtech AB with a short position of AQ Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of Addtech AB and AQ Group.
Diversification Opportunities for Addtech AB and AQ Group
0.36 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Addtech and AQ Group is 0.36. Overlapping area represents the amount of risk that can be diversified away by holding Addtech AB and AQ Group AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AQ Group AB and Addtech AB 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 Addtech AB are associated (or correlated) with AQ Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AQ Group AB has no effect on the direction of Addtech AB i.e., Addtech AB and AQ Group go up and down completely randomly.
Pair Corralation between Addtech AB and AQ Group
Assuming the 90 days trading horizon Addtech AB is expected to generate 3.54 times less return on investment than AQ Group. But when comparing it to its historical volatility, Addtech AB is 1.52 times less risky than AQ Group. It trades about 0.06 of its potential returns per unit of risk. AQ Group AB is currently generating about 0.15 of returns per unit of risk over similar time horizon. If you would invest 13,658 in AQ Group AB on October 26, 2024 and sell it today you would earn a total of 2,900 from holding AQ Group AB or generate 21.23% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Addtech AB vs. AQ Group AB
Performance |
| Timeline |
| Addtech AB |
| AQ Group AB |
Addtech AB and AQ Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Addtech AB and AQ Group
The main advantage of trading using opposite Addtech AB and AQ Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Addtech AB position performs unexpectedly, AQ Group 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 AQ Group will offset losses from the drop in AQ Group's long position.| Addtech AB vs. Indutrade AB | Addtech AB vs. Lifco AB | Addtech AB vs. Lagercrantz Group AB | Addtech AB vs. AddLife AB |
| AQ Group vs. Inwido AB | AQ Group vs. Bufab Holding AB | AQ Group vs. Beijer Alma AB | AQ Group vs. Addtech 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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.
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