Correlation Between Afry AB and Eolus Vind
Can any of the company-specific risk be diversified away by investing in both Afry AB and Eolus Vind 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 Afry AB and Eolus Vind into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Afry AB and Eolus Vind AB, you can compare the effects of market volatilities on Afry AB and Eolus Vind 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 Afry AB with a short position of Eolus Vind. Check out your portfolio center. Please also check ongoing floating volatility patterns of Afry AB and Eolus Vind.
Diversification Opportunities for Afry AB and Eolus Vind
0.67 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Afry and Eolus is 0.67. Overlapping area represents the amount of risk that can be diversified away by holding Afry AB and Eolus Vind AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Eolus Vind AB and Afry 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 Afry AB are associated (or correlated) with Eolus Vind. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Eolus Vind AB has no effect on the direction of Afry AB i.e., Afry AB and Eolus Vind go up and down completely randomly.
Pair Corralation between Afry AB and Eolus Vind
Assuming the 90 days trading horizon Afry AB is expected to generate 0.8 times more return on investment than Eolus Vind. However, Afry AB is 1.25 times less risky than Eolus Vind. It trades about 0.02 of its potential returns per unit of risk. Eolus Vind AB is currently generating about -0.04 per unit of risk. If you would invest 13,925 in Afry AB on August 29, 2024 and sell it today you would earn a total of 1,245 from holding Afry AB or generate 8.94% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Afry AB vs. Eolus Vind AB
Performance |
| Timeline |
| Afry AB |
| Eolus Vind AB |
Afry AB and Eolus Vind Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Afry AB and Eolus Vind
The main advantage of trading using opposite Afry AB and Eolus Vind positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Afry AB position performs unexpectedly, Eolus Vind 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 Eolus Vind will offset losses from the drop in Eolus Vind's long position.The idea behind Afry AB and Eolus Vind AB pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| Eolus Vind vs. NOTE AB | Eolus Vind vs. Zaptec AS | Eolus Vind vs. SolTech Energy Sweden | Eolus Vind vs. Scatec Solar OL |
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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..
Other Complementary Tools
| Volatility Analysis Get historical volatility and risk analysis based on latest market data | |
| Pair Correlation Compare performance and examine fundamental relationship between any two equity instruments | |
| Investing Opportunities Build portfolios using our predefined set of ideas and optimize them against your investing preferences | |
| Bonds Directory Find actively traded corporate debentures issued by US companies | |
| Stock Tickers Use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites |