Correlation Between Alandsbanken Abp and Aktia Bank
Can any of the company-specific risk be diversified away by investing in both Alandsbanken Abp and Aktia Bank 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 Alandsbanken Abp and Aktia Bank into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Alandsbanken Abp A and Aktia Bank Abp, you can compare the effects of market volatilities on Alandsbanken Abp and Aktia Bank 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 Alandsbanken Abp with a short position of Aktia Bank. Check out your portfolio center. Please also check ongoing floating volatility patterns of Alandsbanken Abp and Aktia Bank.
Diversification Opportunities for Alandsbanken Abp and Aktia Bank
0.4 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Alandsbanken and Aktia is 0.4. Overlapping area represents the amount of risk that can be diversified away by holding Alandsbanken Abp A and Aktia Bank Abp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aktia Bank Abp and Alandsbanken Abp 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 Alandsbanken Abp A are associated (or correlated) with Aktia Bank. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aktia Bank Abp has no effect on the direction of Alandsbanken Abp i.e., Alandsbanken Abp and Aktia Bank go up and down completely randomly.
Pair Corralation between Alandsbanken Abp and Aktia Bank
Assuming the 90 days trading horizon Alandsbanken Abp is expected to generate 1.82 times less return on investment than Aktia Bank. In addition to that, Alandsbanken Abp is 1.5 times more volatile than Aktia Bank Abp. It trades about 0.01 of its total potential returns per unit of risk. Aktia Bank Abp is currently generating about 0.02 per unit of volatility. If you would invest 863.00 in Aktia Bank Abp on August 28, 2024 and sell it today you would earn a total of 57.00 from holding Aktia Bank Abp or generate 6.6% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Alandsbanken Abp A vs. Aktia Bank Abp
Performance |
| Timeline |
| Alandsbanken Abp A |
| Aktia Bank Abp |
Alandsbanken Abp and Aktia Bank Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Alandsbanken Abp and Aktia Bank
The main advantage of trading using opposite Alandsbanken Abp and Aktia Bank positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Alandsbanken Abp position performs unexpectedly, Aktia Bank 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 Aktia Bank will offset losses from the drop in Aktia Bank's long position.| Alandsbanken Abp vs. Sampo Oyj A | Alandsbanken Abp vs. Tokmanni Group Oyj | Alandsbanken Abp vs. Nordea Bank Abp | Alandsbanken Abp vs. TietoEVRY Corp |
| Aktia Bank vs. Sampo Oyj A | Aktia Bank vs. Tokmanni Group Oyj | Aktia Bank vs. Nordea Bank Abp | Aktia Bank vs. TietoEVRY Corp |
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 Channel module to use Commodity Channel Index to analyze current equity momentum.
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