Correlation Between Alandsbanken Abp and Elecster Oyj
Can any of the company-specific risk be diversified away by investing in both Alandsbanken Abp and Elecster Oyj 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 Elecster Oyj into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Alandsbanken Abp B and Elecster Oyj A, you can compare the effects of market volatilities on Alandsbanken Abp and Elecster Oyj 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 Elecster Oyj. Check out your portfolio center. Please also check ongoing floating volatility patterns of Alandsbanken Abp and Elecster Oyj.
Diversification Opportunities for Alandsbanken Abp and Elecster Oyj
-0.13 | Correlation Coefficient |
Good diversification
The 3 months correlation between Alandsbanken and Elecster is -0.13. Overlapping area represents the amount of risk that can be diversified away by holding Alandsbanken Abp B and Elecster Oyj A in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Elecster Oyj A 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 B are associated (or correlated) with Elecster Oyj. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Elecster Oyj A has no effect on the direction of Alandsbanken Abp i.e., Alandsbanken Abp and Elecster Oyj go up and down completely randomly.
Pair Corralation between Alandsbanken Abp and Elecster Oyj
Assuming the 90 days trading horizon Alandsbanken Abp B is expected to generate 0.4 times more return on investment than Elecster Oyj. However, Alandsbanken Abp B is 2.48 times less risky than Elecster Oyj. It trades about 0.01 of its potential returns per unit of risk. Elecster Oyj A is currently generating about -0.03 per unit of risk. If you would invest 3,583 in Alandsbanken Abp B on November 19, 2024 and sell it today you would earn a total of 167.00 from holding Alandsbanken Abp B or generate 4.66% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Alandsbanken Abp B vs. Elecster Oyj A
Performance |
| Timeline |
| Alandsbanken Abp B |
| Elecster Oyj A |
Alandsbanken Abp and Elecster Oyj Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Alandsbanken Abp and Elecster Oyj
The main advantage of trading using opposite Alandsbanken Abp and Elecster Oyj positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Alandsbanken Abp position performs unexpectedly, Elecster Oyj 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 Elecster Oyj will offset losses from the drop in Elecster Oyj's long position.| Alandsbanken Abp vs. Aktia Bank Abp | Alandsbanken Abp vs. Alandsbanken Abp A | Alandsbanken Abp vs. Oma Saastopankki Oyj | Alandsbanken Abp vs. CapMan Oyj B |
| Elecster Oyj vs. Raute Oyj | Elecster Oyj vs. Honkarakenne Oyj B | Elecster Oyj vs. Wulff Yhtiot Oy | Elecster Oyj vs. Biohit Oyj B |
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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.
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