Correlation Between Aino Health and Softronic
Can any of the company-specific risk be diversified away by investing in both Aino Health and Softronic 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 Aino Health and Softronic into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Aino Health AB and Softronic AB, you can compare the effects of market volatilities on Aino Health and Softronic 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 Aino Health with a short position of Softronic. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aino Health and Softronic.
Diversification Opportunities for Aino Health and Softronic
-0.14 | Correlation Coefficient |
Good diversification
The 3 months correlation between Aino and Softronic is -0.14. Overlapping area represents the amount of risk that can be diversified away by holding Aino Health AB and Softronic AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Softronic AB and Aino Health 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 Aino Health AB are associated (or correlated) with Softronic. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Softronic AB has no effect on the direction of Aino Health i.e., Aino Health and Softronic go up and down completely randomly.
Pair Corralation between Aino Health and Softronic
Assuming the 90 days trading horizon Aino Health AB is expected to generate 4.96 times more return on investment than Softronic. However, Aino Health is 4.96 times more volatile than Softronic AB. It trades about 0.09 of its potential returns per unit of risk. Softronic AB is currently generating about 0.18 per unit of risk. If you would invest 13.00 in Aino Health AB on August 25, 2024 and sell it today you would earn a total of 1.00 from holding Aino Health AB or generate 7.69% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Aino Health AB vs. Softronic AB
Performance |
| Timeline |
| Aino Health AB |
| Softronic AB |
Aino Health and Softronic Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Aino Health and Softronic
The main advantage of trading using opposite Aino Health and Softronic positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aino Health position performs unexpectedly, Softronic 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 Softronic will offset losses from the drop in Softronic's long position.| Aino Health vs. Softronic AB | Aino Health vs. Svedbergs i Dalstorp | Aino Health vs. Know IT AB | Aino Health vs. FormPipe Software 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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.
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