Correlation Between Addtech AB and Upsales Technology
Can any of the company-specific risk be diversified away by investing in both Addtech AB and Upsales Technology 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 Upsales Technology into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Addtech AB and Upsales Technology AB, you can compare the effects of market volatilities on Addtech AB and Upsales Technology 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 Upsales Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of Addtech AB and Upsales Technology.
Diversification Opportunities for Addtech AB and Upsales Technology
0.46 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Addtech and Upsales is 0.46. Overlapping area represents the amount of risk that can be diversified away by holding Addtech AB and Upsales Technology AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Upsales Technology 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 Upsales Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Upsales Technology has no effect on the direction of Addtech AB i.e., Addtech AB and Upsales Technology go up and down completely randomly.
Pair Corralation between Addtech AB and Upsales Technology
Assuming the 90 days trading horizon Addtech AB is expected to generate 0.6 times more return on investment than Upsales Technology. However, Addtech AB is 1.67 times less risky than Upsales Technology. It trades about 0.01 of its potential returns per unit of risk. Upsales Technology AB is currently generating about -0.13 per unit of risk. If you would invest 30,120 in Addtech AB on August 28, 2024 and sell it today you would earn a total of 0.00 from holding Addtech AB or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Addtech AB vs. Upsales Technology AB
Performance |
| Timeline |
| Addtech AB |
| Upsales Technology |
Addtech AB and Upsales Technology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Addtech AB and Upsales Technology
The main advantage of trading using opposite Addtech AB and Upsales Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Addtech AB position performs unexpectedly, Upsales Technology 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 Upsales Technology will offset losses from the drop in Upsales Technology's long position.| Addtech AB vs. Indutrade AB | Addtech AB vs. Lifco AB | Addtech AB vs. Lagercrantz Group AB | Addtech AB vs. AddLife AB |
| Upsales Technology vs. Lime Technologies AB | Upsales Technology vs. FormPipe Software AB | Upsales Technology vs. Surgical Science Sweden | Upsales Technology vs. Vitec Software Group |
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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.
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