Correlation Between ASSOC BR and SVENSKA CELLULO
Can any of the company-specific risk be diversified away by investing in both ASSOC BR and SVENSKA CELLULO 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 ASSOC BR and SVENSKA CELLULO into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ASSOC BR FOODS and SVENSKA CELLULO B , you can compare the effects of market volatilities on ASSOC BR and SVENSKA CELLULO 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 ASSOC BR with a short position of SVENSKA CELLULO. Check out your portfolio center. Please also check ongoing floating volatility patterns of ASSOC BR and SVENSKA CELLULO.
Diversification Opportunities for ASSOC BR and SVENSKA CELLULO
0.12 | Correlation Coefficient |
Average diversification
The 3 months correlation between ASSOC and SVENSKA is 0.12. Overlapping area represents the amount of risk that can be diversified away by holding ASSOC BR FOODS and SVENSKA CELLULO B in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SVENSKA CELLULO B and ASSOC BR 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 ASSOC BR FOODS are associated (or correlated) with SVENSKA CELLULO. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SVENSKA CELLULO B has no effect on the direction of ASSOC BR i.e., ASSOC BR and SVENSKA CELLULO go up and down completely randomly.
Pair Corralation between ASSOC BR and SVENSKA CELLULO
Assuming the 90 days trading horizon ASSOC BR is expected to generate 7.58 times less return on investment than SVENSKA CELLULO. In addition to that, ASSOC BR is 1.06 times more volatile than SVENSKA CELLULO B . It trades about 0.03 of its total potential returns per unit of risk. SVENSKA CELLULO B is currently generating about 0.27 per unit of volatility. If you would invest 1,160 in SVENSKA CELLULO B on September 13, 2024 and sell it today you would earn a total of 86.00 from holding SVENSKA CELLULO B or generate 7.41% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 95.65% |
| Values | Daily Returns |
ASSOC BR FOODS vs. SVENSKA CELLULO B
Performance |
| Timeline |
| ASSOC BR FOODS |
| SVENSKA CELLULO B |
ASSOC BR and SVENSKA CELLULO Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ASSOC BR and SVENSKA CELLULO
The main advantage of trading using opposite ASSOC BR and SVENSKA CELLULO positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ASSOC BR position performs unexpectedly, SVENSKA CELLULO 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 SVENSKA CELLULO will offset losses from the drop in SVENSKA CELLULO's long position.| ASSOC BR vs. Hormel Foods | ASSOC BR vs. Superior Plus Corp | ASSOC BR vs. SIVERS SEMICONDUCTORS AB | ASSOC BR vs. NorAm Drilling AS |
| SVENSKA CELLULO vs. PREMIER FOODS | SVENSKA CELLULO vs. Jacquet Metal Service | SVENSKA CELLULO vs. EBRO FOODS | SVENSKA CELLULO vs. Collins Foods Limited |
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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.
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