Correlation Between Addtech AB and Clavister Holding
Can any of the company-specific risk be diversified away by investing in both Addtech AB and Clavister 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 Clavister 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 Clavister Holding AB, you can compare the effects of market volatilities on Addtech AB and Clavister 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 Clavister Holding. Check out your portfolio center. Please also check ongoing floating volatility patterns of Addtech AB and Clavister Holding.
Diversification Opportunities for Addtech AB and Clavister Holding
-0.06 | Correlation Coefficient |
Good diversification
The 3 months correlation between Addtech and Clavister is -0.06. Overlapping area represents the amount of risk that can be diversified away by holding Addtech AB and Clavister Holding AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Clavister Holding 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 Clavister Holding. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Clavister Holding has no effect on the direction of Addtech AB i.e., Addtech AB and Clavister Holding go up and down completely randomly.
Pair Corralation between Addtech AB and Clavister Holding
Assuming the 90 days trading horizon Addtech AB is expected to generate 19.72 times less return on investment than Clavister Holding. But when comparing it to its historical volatility, Addtech AB is 3.23 times less risky than Clavister Holding. It trades about 0.05 of its potential returns per unit of risk. Clavister Holding AB is currently generating about 0.32 of returns per unit of risk over similar time horizon. If you would invest 142.00 in Clavister Holding AB on September 1, 2024 and sell it today you would earn a total of 58.00 from holding Clavister Holding AB or generate 40.85% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.65% |
| Values | Daily Returns |
Addtech AB vs. Clavister Holding AB
Performance |
| Timeline |
| Addtech AB |
| Clavister Holding |
Addtech AB and Clavister Holding Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Addtech AB and Clavister Holding
The main advantage of trading using opposite Addtech AB and Clavister Holding positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Addtech AB position performs unexpectedly, Clavister 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 Clavister Holding will offset losses from the drop in Clavister 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 |
| Clavister Holding vs. BIMobject AB | Clavister Holding vs. Advenica AB | Clavister Holding vs. Crunchfish AB | Clavister Holding vs. Nexam Chemical Holding |
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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.
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