Correlation Between Addtech AB and SinterCast
Can any of the company-specific risk be diversified away by investing in both Addtech AB and SinterCast 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 SinterCast into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Addtech AB and SinterCast AB, you can compare the effects of market volatilities on Addtech AB and SinterCast 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 SinterCast. Check out your portfolio center. Please also check ongoing floating volatility patterns of Addtech AB and SinterCast.
Diversification Opportunities for Addtech AB and SinterCast
-0.08 | Correlation Coefficient |
Good diversification
The 3 months correlation between Addtech and SinterCast is -0.08. Overlapping area represents the amount of risk that can be diversified away by holding Addtech AB and SinterCast AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SinterCast 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 SinterCast. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SinterCast AB has no effect on the direction of Addtech AB i.e., Addtech AB and SinterCast go up and down completely randomly.
Pair Corralation between Addtech AB and SinterCast
Assuming the 90 days trading horizon Addtech AB is expected to generate 1.83 times more return on investment than SinterCast. However, Addtech AB is 1.83 times more volatile than SinterCast AB. It trades about 0.2 of its potential returns per unit of risk. SinterCast AB is currently generating about -0.07 per unit of risk. If you would invest 30,520 in Addtech AB on November 4, 2024 and sell it today you would earn a total of 1,920 from holding Addtech AB or generate 6.29% 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. SinterCast AB
Performance |
| Timeline |
| Addtech AB |
| SinterCast AB |
Addtech AB and SinterCast Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Addtech AB and SinterCast
The main advantage of trading using opposite Addtech AB and SinterCast positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Addtech AB position performs unexpectedly, SinterCast 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 SinterCast will offset losses from the drop in SinterCast's long position.| Addtech AB vs. Indutrade AB | Addtech AB vs. Lifco AB | Addtech AB vs. Lagercrantz Group AB | Addtech AB vs. AddLife AB |
| SinterCast vs. CTT Systems AB | SinterCast vs. Studsvik AB | SinterCast vs. Proact IT Group | SinterCast vs. Rottneros 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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.
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