Correlation Between Alandsbanken Abp and Viking Line
Can any of the company-specific risk be diversified away by investing in both Alandsbanken Abp and Viking Line 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 Viking Line 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 Viking Line Abp, you can compare the effects of market volatilities on Alandsbanken Abp and Viking Line 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 Viking Line. Check out your portfolio center. Please also check ongoing floating volatility patterns of Alandsbanken Abp and Viking Line.
Diversification Opportunities for Alandsbanken Abp and Viking Line
0.31 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Alandsbanken and Viking is 0.31. Overlapping area represents the amount of risk that can be diversified away by holding Alandsbanken Abp A and Viking Line Abp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Viking Line 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 Viking Line. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Viking Line Abp has no effect on the direction of Alandsbanken Abp i.e., Alandsbanken Abp and Viking Line go up and down completely randomly.
Pair Corralation between Alandsbanken Abp and Viking Line
Assuming the 90 days trading horizon Alandsbanken Abp is expected to generate 14.85 times less return on investment than Viking Line. But when comparing it to its historical volatility, Alandsbanken Abp A is 1.07 times less risky than Viking Line. It trades about 0.01 of its potential returns per unit of risk. Viking Line Abp is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 1,168 in Viking Line Abp on August 30, 2024 and sell it today you would earn a total of 852.00 from holding Viking Line Abp or generate 72.95% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Alandsbanken Abp A vs. Viking Line Abp
Performance |
| Timeline |
| Alandsbanken Abp A |
| Viking Line Abp |
Alandsbanken Abp and Viking Line Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Alandsbanken Abp and Viking Line
The main advantage of trading using opposite Alandsbanken Abp and Viking Line positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Alandsbanken Abp position performs unexpectedly, Viking Line 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 Viking Line will offset losses from the drop in Viking Line's long position.| Alandsbanken Abp vs. Aktia Bank Abp | Alandsbanken Abp vs. Alandsbanken Abp B | Alandsbanken Abp vs. CapMan Oyj B | Alandsbanken Abp vs. Tokmanni Group Oyj |
| Viking Line vs. Harvia Oyj | Viking Line vs. Kamux Suomi Oy | Viking Line vs. Qt Group Oyj | Viking Line vs. Revenio Group |
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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.
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