Correlation Between Alfa Laval and Anoto Group
Can any of the company-specific risk be diversified away by investing in both Alfa Laval and Anoto Group 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 Alfa Laval and Anoto Group into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Alfa Laval AB and Anoto Group AB, you can compare the effects of market volatilities on Alfa Laval and Anoto Group 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 Anoto Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of Alfa Laval and Anoto Group.
Diversification Opportunities for Alfa Laval and Anoto Group
0.18 | Correlation Coefficient |
Average diversification
The 3 months correlation between Alfa and Anoto is 0.18. Overlapping area represents the amount of risk that can be diversified away by holding Alfa Laval AB and Anoto Group AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Anoto Group AB 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 Anoto Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Anoto Group AB has no effect on the direction of Alfa Laval i.e., Alfa Laval and Anoto Group go up and down completely randomly.
Pair Corralation between Alfa Laval and Anoto Group
Assuming the 90 days trading horizon Alfa Laval AB is expected to under-perform the Anoto Group. But the stock apears to be less risky and, when comparing its historical volatility, Alfa Laval AB is 7.51 times less risky than Anoto Group. The stock trades about 0.0 of its potential returns per unit of risk. The Anoto Group AB is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 16.00 in Anoto Group AB on August 28, 2024 and sell it today you would earn a total of 3.00 from holding Anoto Group AB or generate 18.75% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Alfa Laval AB vs. Anoto Group AB
Performance |
| Timeline |
| Alfa Laval AB |
| Anoto Group AB |
Alfa Laval and Anoto Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Alfa Laval and Anoto Group
The main advantage of trading using opposite Alfa Laval and Anoto Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Alfa Laval position performs unexpectedly, Anoto Group 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 Anoto Group will offset losses from the drop in Anoto Group's long position.| Alfa Laval vs. Addtech AB | Alfa Laval vs. Teqnion AB | Alfa Laval vs. Vitec Software Group | Alfa Laval vs. Lagercrantz Group AB |
| Anoto Group vs. Novotek AB | Anoto Group vs. Addnode Group AB | Anoto Group vs. Softronic AB | Anoto Group vs. CTT Systems 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 Portfolio Center module to all portfolio management and optimization tools to improve performance of your portfolios.
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