Correlation Between AddLife AB and Desenio Group
Can any of the company-specific risk be diversified away by investing in both AddLife AB and Desenio 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 AddLife AB and Desenio Group into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between AddLife AB and Desenio Group AB, you can compare the effects of market volatilities on AddLife AB and Desenio 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 AddLife AB with a short position of Desenio Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of AddLife AB and Desenio Group.
Diversification Opportunities for AddLife AB and Desenio Group
0.22 | Correlation Coefficient |
Modest diversification
The 3 months correlation between AddLife and Desenio is 0.22. Overlapping area represents the amount of risk that can be diversified away by holding AddLife AB and Desenio Group AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Desenio Group AB and AddLife AB 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 AddLife AB are associated (or correlated) with Desenio Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Desenio Group AB has no effect on the direction of AddLife AB i.e., AddLife AB and Desenio Group go up and down completely randomly.
Pair Corralation between AddLife AB and Desenio Group
Assuming the 90 days trading horizon AddLife AB is expected to generate 5.25 times less return on investment than Desenio Group. But when comparing it to its historical volatility, AddLife AB is 5.78 times less risky than Desenio Group. It trades about 0.06 of its potential returns per unit of risk. Desenio Group AB is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 27.00 in Desenio Group AB on September 5, 2024 and sell it today you would earn a total of 4.00 from holding Desenio Group AB or generate 14.81% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
AddLife AB vs. Desenio Group AB
Performance |
| Timeline |
| AddLife AB |
| Desenio Group AB |
AddLife AB and Desenio Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with AddLife AB and Desenio Group
The main advantage of trading using opposite AddLife AB and Desenio Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AddLife AB position performs unexpectedly, Desenio 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 Desenio Group will offset losses from the drop in Desenio Group's long position.| AddLife AB vs. Getinge AB ser | AddLife AB vs. Biotage AB | AddLife AB vs. Bonesupport Holding AB | AddLife AB vs. Fluoguide AS |
| Desenio Group vs. Rugvista Group AB | Desenio Group vs. Cint Group AB | Desenio Group vs. BHG Group AB | Desenio Group vs. Lyko Group A |
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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.
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