Correlation Between Alcadon Group and Nolato AB
Can any of the company-specific risk be diversified away by investing in both Alcadon Group and Nolato 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 Alcadon Group and Nolato AB into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Alcadon Group AB and Nolato AB, you can compare the effects of market volatilities on Alcadon Group and Nolato 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 Alcadon Group with a short position of Nolato AB. Check out your portfolio center. Please also check ongoing floating volatility patterns of Alcadon Group and Nolato AB.
Diversification Opportunities for Alcadon Group and Nolato AB
-0.47 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Alcadon and Nolato is -0.47. Overlapping area represents the amount of risk that can be diversified away by holding Alcadon Group AB and Nolato AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nolato AB and Alcadon Group 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 Alcadon Group AB are associated (or correlated) with Nolato AB. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nolato AB has no effect on the direction of Alcadon Group i.e., Alcadon Group and Nolato AB go up and down completely randomly.
Pair Corralation between Alcadon Group and Nolato AB
Assuming the 90 days trading horizon Alcadon Group AB is expected to under-perform the Nolato AB. In addition to that, Alcadon Group is 1.22 times more volatile than Nolato AB. It trades about -0.06 of its total potential returns per unit of risk. Nolato AB is currently generating about 0.01 per unit of volatility. If you would invest 5,475 in Nolato AB on August 24, 2024 and sell it today you would lose (170.00) from holding Nolato AB or give up 3.11% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Alcadon Group AB vs. Nolato AB
Performance |
| Timeline |
| Alcadon Group AB |
| Nolato AB |
Alcadon Group and Nolato AB Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Alcadon Group and Nolato AB
The main advantage of trading using opposite Alcadon Group and Nolato AB positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Alcadon Group position performs unexpectedly, Nolato 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 Nolato AB will offset losses from the drop in Nolato AB's long position.| Alcadon Group vs. DistIT AB | Alcadon Group vs. Addnode Group AB | Alcadon Group vs. Awardit AB | Alcadon Group vs. Avensia publ AB |
| Nolato AB vs. HEXPOL AB | Nolato AB vs. Trelleborg AB | Nolato AB vs. Indutrade AB | Nolato AB vs. Vitrolife 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 Positions Ratings module to 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.
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