Correlation Between Alfa Laval and Autoliv
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By analyzing existing cross correlation between Alfa Laval AB and Autoliv, you can compare the effects of market volatilities on Alfa Laval and Autoliv 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 Alfa Laval with a short position of Autoliv. Check out your portfolio center. Please also check ongoing floating volatility patterns of Alfa Laval and Autoliv.
Diversification Opportunities for Alfa Laval and Autoliv
0.2 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Alfa and Autoliv is 0.2. Overlapping area represents the amount of risk that can be diversified away by holding Alfa Laval AB and Autoliv in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Autoliv and Alfa Laval 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 Alfa Laval AB are associated (or correlated) with Autoliv. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Autoliv has no effect on the direction of Alfa Laval i.e., Alfa Laval and Autoliv go up and down completely randomly.
Pair Corralation between Alfa Laval and Autoliv
Assuming the 90 days trading horizon Alfa Laval is expected to generate 1.19 times less return on investment than Autoliv. But when comparing it to its historical volatility, Alfa Laval AB is 1.05 times less risky than Autoliv. It trades about 0.28 of its potential returns per unit of risk. Autoliv is currently generating about 0.32 of returns per unit of risk over similar time horizon. If you would invest 104,060 in Autoliv on October 28, 2024 and sell it today you would earn a total of 7,380 from holding Autoliv or generate 7.09% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Alfa Laval AB vs. Autoliv
Performance |
| Timeline |
| Alfa Laval AB |
| Autoliv |
Alfa Laval and Autoliv Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Alfa Laval and Autoliv
The main advantage of trading using opposite Alfa Laval and Autoliv positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Alfa Laval position performs unexpectedly, Autoliv 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 Autoliv will offset losses from the drop in Autoliv's long position.| Alfa Laval vs. Sandvik AB | Alfa Laval vs. AB SKF | Alfa Laval vs. ASSA ABLOY AB | Alfa Laval vs. Atlas Copco 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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.
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