Correlation Between Alefarm Brewing and Stenocare
Can any of the company-specific risk be diversified away by investing in both Alefarm Brewing and Stenocare 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 Stenocare 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 Stenocare AS, you can compare the effects of market volatilities on Alefarm Brewing and Stenocare 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 Stenocare. Check out your portfolio center. Please also check ongoing floating volatility patterns of Alefarm Brewing and Stenocare.
Diversification Opportunities for Alefarm Brewing and Stenocare
0.26 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Alefarm and Stenocare is 0.26. Overlapping area represents the amount of risk that can be diversified away by holding Alefarm Brewing AS and Stenocare AS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Stenocare 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 Stenocare. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Stenocare AS has no effect on the direction of Alefarm Brewing i.e., Alefarm Brewing and Stenocare go up and down completely randomly.
Pair Corralation between Alefarm Brewing and Stenocare
Assuming the 90 days trading horizon Alefarm Brewing AS is expected to generate 0.33 times more return on investment than Stenocare. However, Alefarm Brewing AS is 3.01 times less risky than Stenocare. It trades about 0.18 of its potential returns per unit of risk. Stenocare AS is currently generating about -0.26 per unit of risk. If you would invest 138.00 in Alefarm Brewing AS on November 27, 2024 and sell it today you would earn a total of 17.00 from holding Alefarm Brewing AS or generate 12.32% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Alefarm Brewing AS vs. Stenocare AS
Performance |
| Timeline |
| Alefarm Brewing AS |
| Stenocare AS |
Alefarm Brewing and Stenocare Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Alefarm Brewing and Stenocare
The main advantage of trading using opposite Alefarm Brewing and Stenocare positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Alefarm Brewing position performs unexpectedly, Stenocare 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 Stenocare will offset losses from the drop in Stenocare's long position.| Alefarm Brewing vs. BankIn Bredygt Klimaakt | Alefarm Brewing vs. NTG Nordic Transport | Alefarm Brewing vs. Dataproces Group AS | Alefarm Brewing vs. Formuepleje Mix Medium |
| Stenocare vs. Embla Medical hf | Stenocare vs. Fynske Bank AS | Stenocare vs. Jyske Bank AS | Stenocare vs. Scandinavian Medical Solutions |
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 Portfolio File Import module to quickly import all of your third-party portfolios from your local drive in csv format.
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