Correlation Between Afry AB and Peab AB
Can any of the company-specific risk be diversified away by investing in both Afry 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 Afry 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 Afry AB and Peab AB, you can compare the effects of market volatilities on Afry 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 Afry AB with a short position of Peab AB. Check out your portfolio center. Please also check ongoing floating volatility patterns of Afry AB and Peab AB.
Diversification Opportunities for Afry AB and Peab AB
Excellent diversification
The 3 months correlation between Afry and Peab is -0.53. Overlapping area represents the amount of risk that can be diversified away by holding Afry AB and Peab AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Peab 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 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 Afry AB i.e., Afry AB and Peab AB go up and down completely randomly.
Pair Corralation between Afry AB and Peab AB
Assuming the 90 days trading horizon Afry AB is expected to under-perform the Peab AB. In addition to that, Afry AB is 1.32 times more volatile than Peab AB. It trades about -0.24 of its total potential returns per unit of risk. Peab AB is currently generating about -0.03 per unit of volatility. If you would invest 8,130 in Peab AB on August 29, 2024 and sell it today you would lose (100.00) from holding Peab AB or give up 1.23% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Afry AB vs. Peab AB
Performance |
| Timeline |
| Afry AB |
| Peab AB |
Afry AB and Peab AB Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Afry AB and Peab AB
The main advantage of trading using opposite Afry AB and Peab AB positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Afry 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.The idea behind Afry AB and Peab 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.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 Commodity Directory module to find actively traded commodities issued by global exchanges.
Other Complementary Tools
| Instant Ratings Determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Positions Ratings Determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Share Portfolio Track or share privately all of your investments from the convenience of any device | |
| Insider Screener Find insiders across different sectors to evaluate their impact on performance | |
| Cryptocurrency Center Build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency |