Correlation Between Alefarm Brewing and Erria AS
Can any of the company-specific risk be diversified away by investing in both Alefarm Brewing and Erria AS 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 Alefarm Brewing and Erria AS into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Alefarm Brewing AS and Erria AS, you can compare the effects of market volatilities on Alefarm Brewing and Erria AS 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 Alefarm Brewing with a short position of Erria AS. Check out your portfolio center. Please also check ongoing floating volatility patterns of Alefarm Brewing and Erria AS.
Diversification Opportunities for Alefarm Brewing and Erria AS
0.06 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Alefarm and Erria is 0.06. Overlapping area represents the amount of risk that can be diversified away by holding Alefarm Brewing AS and Erria AS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Erria AS and Alefarm Brewing 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 Alefarm Brewing AS are associated (or correlated) with Erria AS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Erria AS has no effect on the direction of Alefarm Brewing i.e., Alefarm Brewing and Erria AS go up and down completely randomly.
Pair Corralation between Alefarm Brewing and Erria AS
Assuming the 90 days trading horizon Alefarm Brewing AS is expected to generate 1.36 times more return on investment than Erria AS. However, Alefarm Brewing is 1.36 times more volatile than Erria AS. It trades about 0.01 of its potential returns per unit of risk. Erria AS is currently generating about -0.01 per unit of risk. If you would invest 165.00 in Alefarm Brewing AS on September 15, 2024 and sell it today you would lose (24.00) from holding Alefarm Brewing AS or give up 14.55% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 99.63% |
| Values | Daily Returns |
Alefarm Brewing AS vs. Erria AS
Performance |
| Timeline |
| Alefarm Brewing AS |
| Erria AS |
Alefarm Brewing and Erria AS Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Alefarm Brewing and Erria AS
The main advantage of trading using opposite Alefarm Brewing and Erria AS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Alefarm Brewing position performs unexpectedly, Erria AS 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 Erria AS will offset losses from the drop in Erria AS's long position.| Alefarm Brewing vs. Skjern Bank AS | Alefarm Brewing vs. TROPHY GAMES Development | Alefarm Brewing vs. Kreditbanken AS | Alefarm Brewing vs. Jyske Bank AS |
| Erria AS vs. NTG Nordic Transport | Erria AS vs. Prime Office AS | Erria AS vs. Laan Spar Bank | Erria AS vs. Alefarm Brewing AS |
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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.
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