Correlation Between Addtech AB and Peab AB
Can any of the company-specific risk be diversified away by investing in both Addtech AB and Peab AB 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 Peab AB into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Addtech AB and Peab AB, you can compare the effects of market volatilities on Addtech AB and Peab AB 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 Peab AB. Check out your portfolio center. Please also check ongoing floating volatility patterns of Addtech AB and Peab AB.
Diversification Opportunities for Addtech AB and Peab AB
-0.02 | Correlation Coefficient |
Good diversification
The 3 months correlation between Addtech and Peab is -0.02. Overlapping area represents the amount of risk that can be diversified away by holding Addtech AB and Peab AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Peab 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 Peab AB. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Peab AB has no effect on the direction of Addtech AB i.e., Addtech AB and Peab AB go up and down completely randomly.
Pair Corralation between Addtech AB and Peab AB
Assuming the 90 days trading horizon Addtech AB is expected to generate 0.93 times more return on investment than Peab AB. However, Addtech AB is 1.07 times less risky than Peab AB. It trades about 0.08 of its potential returns per unit of risk. Peab AB is currently generating about 0.05 per unit of risk. If you would invest 15,432 in Addtech AB on August 30, 2024 and sell it today you would earn a total of 14,568 from holding Addtech AB or generate 94.4% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Addtech AB vs. Peab AB
Performance |
| Timeline |
| Addtech AB |
| Peab AB |
Addtech AB and Peab AB Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Addtech AB and Peab AB
The main advantage of trading using opposite Addtech AB and Peab AB positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Addtech AB position performs unexpectedly, Peab AB 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 Peab AB will offset losses from the drop in Peab AB's long position.| Addtech AB vs. Indutrade AB | Addtech AB vs. Lifco AB | Addtech AB vs. Lagercrantz Group AB | Addtech AB vs. AddLife AB |
| Peab AB vs. AVTECH Sweden AB | Peab AB vs. OptiCept Technologies AB | Peab AB vs. Lime Technologies AB | Peab AB vs. Maven Wireless Sweden |
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 Global Correlations module to find global opportunities by holding instruments from different markets.
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