Correlation Between Alfa Laval and Essity AB
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By analyzing existing cross correlation between Alfa Laval AB and Essity AB, you can compare the effects of market volatilities on Alfa Laval and Essity 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 Alfa Laval with a short position of Essity AB. Check out your portfolio center. Please also check ongoing floating volatility patterns of Alfa Laval and Essity AB.
Diversification Opportunities for Alfa Laval and Essity AB
-0.23 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Alfa and Essity is -0.23. Overlapping area represents the amount of risk that can be diversified away by holding Alfa Laval AB and Essity AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Essity 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 Essity AB. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Essity AB has no effect on the direction of Alfa Laval i.e., Alfa Laval and Essity AB go up and down completely randomly.
Pair Corralation between Alfa Laval and Essity AB
Assuming the 90 days trading horizon Alfa Laval AB is expected to generate 1.15 times more return on investment than Essity AB. However, Alfa Laval is 1.15 times more volatile than Essity AB. It trades about 0.04 of its potential returns per unit of risk. Essity AB is currently generating about 0.02 per unit of risk. If you would invest 39,434 in Alfa Laval AB on August 31, 2024 and sell it today you would earn a total of 6,996 from holding Alfa Laval AB or generate 17.74% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Alfa Laval AB vs. Essity AB
Performance |
| Timeline |
| Alfa Laval AB |
| Essity AB |
Alfa Laval and Essity AB Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Alfa Laval and Essity AB
The main advantage of trading using opposite Alfa Laval and Essity AB positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Alfa Laval position performs unexpectedly, Essity 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 Essity AB will offset losses from the drop in Essity AB's long position.| Alfa Laval vs. Samhllsbyggnadsbolaget i Norden | Alfa Laval vs. Sinch AB | Alfa Laval vs. Embracer Group AB | Alfa Laval vs. Evolution AB |
| Essity AB vs. Mendus AB | Essity AB vs. JonDeTech Sensors | Essity AB vs. Nexam Chemical Holding | Essity AB vs. Lohilo Foods 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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..
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