Correlation Between Addtech AB and Bravida Holding
Can any of the company-specific risk be diversified away by investing in both Addtech AB and Bravida Holding 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 Bravida Holding into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Addtech AB and Bravida Holding AB, you can compare the effects of market volatilities on Addtech AB and Bravida Holding 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 Bravida Holding. Check out your portfolio center. Please also check ongoing floating volatility patterns of Addtech AB and Bravida Holding.
Diversification Opportunities for Addtech AB and Bravida Holding
0.61 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Addtech and Bravida is 0.61. Overlapping area represents the amount of risk that can be diversified away by holding Addtech AB and Bravida Holding AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bravida Holding 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 Bravida Holding. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bravida Holding AB has no effect on the direction of Addtech AB i.e., Addtech AB and Bravida Holding go up and down completely randomly.
Pair Corralation between Addtech AB and Bravida Holding
Assuming the 90 days trading horizon Addtech AB is expected to generate 1.23 times less return on investment than Bravida Holding. But when comparing it to its historical volatility, Addtech AB is 1.06 times less risky than Bravida Holding. It trades about 0.02 of its potential returns per unit of risk. Bravida Holding AB is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest 7,800 in Bravida Holding AB on August 29, 2024 and sell it today you would earn a total of 40.00 from holding Bravida Holding AB or generate 0.51% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Addtech AB vs. Bravida Holding AB
Performance |
| Timeline |
| Addtech AB |
| Bravida Holding AB |
Addtech AB and Bravida Holding Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Addtech AB and Bravida Holding
The main advantage of trading using opposite Addtech AB and Bravida Holding positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Addtech AB position performs unexpectedly, Bravida Holding 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 Bravida Holding will offset losses from the drop in Bravida Holding's long position.| Addtech AB vs. Indutrade AB | Addtech AB vs. Lifco AB | Addtech AB vs. Lagercrantz Group AB | Addtech AB vs. AddLife AB |
| Bravida Holding vs. Nolato AB | Bravida Holding vs. Indutrade AB | Bravida Holding vs. HEXPOL AB | Bravida Holding 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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.
Other Complementary Tools
| Price Ceiling Movement Calculate and plot Price Ceiling Movement for different equity instruments | |
| Cryptocurrency Center Build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency | |
| Premium Stories Follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope | |
| Companies Directory Evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals | |
| Portfolio Manager State of the art Portfolio Manager to monitor and improve performance of your invested capital |