Correlation Between AddLife AB and Fluoguide
Can any of the company-specific risk be diversified away by investing in both AddLife AB and Fluoguide 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 Fluoguide into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between AddLife AB and Fluoguide AS, you can compare the effects of market volatilities on AddLife AB and Fluoguide 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 Fluoguide. Check out your portfolio center. Please also check ongoing floating volatility patterns of AddLife AB and Fluoguide.
Diversification Opportunities for AddLife AB and Fluoguide
0.77 | Correlation Coefficient |
Poor diversification
The 3 months correlation between AddLife and Fluoguide is 0.77. Overlapping area represents the amount of risk that can be diversified away by holding AddLife AB and Fluoguide AS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fluoguide AS 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 Fluoguide. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fluoguide AS has no effect on the direction of AddLife AB i.e., AddLife AB and Fluoguide go up and down completely randomly.
Pair Corralation between AddLife AB and Fluoguide
Assuming the 90 days trading horizon AddLife AB is expected to generate 0.92 times more return on investment than Fluoguide. However, AddLife AB is 1.09 times less risky than Fluoguide. It trades about 0.01 of its potential returns per unit of risk. Fluoguide AS is currently generating about -0.05 per unit of risk. If you would invest 13,557 in AddLife AB on September 2, 2024 and sell it today you would lose (247.00) from holding AddLife AB or give up 1.82% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
AddLife AB vs. Fluoguide AS
Performance |
| Timeline |
| AddLife AB |
| Fluoguide AS |
AddLife AB and Fluoguide Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with AddLife AB and Fluoguide
The main advantage of trading using opposite AddLife AB and Fluoguide positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AddLife AB position performs unexpectedly, Fluoguide 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 Fluoguide will offset losses from the drop in Fluoguide's long position.The idea behind AddLife AB and Fluoguide AS pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| Fluoguide vs. ExpreS2ion Biotech Holding | Fluoguide vs. Hansa Biopharma AB | Fluoguide vs. cBrain AS | Fluoguide vs. BioPorto |
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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
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