Correlation Between AddLife AB and Fenix Outdoor
Can any of the company-specific risk be diversified away by investing in both AddLife AB and Fenix Outdoor 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 Fenix Outdoor into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between AddLife AB and Fenix Outdoor International, you can compare the effects of market volatilities on AddLife AB and Fenix Outdoor 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 Fenix Outdoor. Check out your portfolio center. Please also check ongoing floating volatility patterns of AddLife AB and Fenix Outdoor.
Diversification Opportunities for AddLife AB and Fenix Outdoor
0.52 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between AddLife and Fenix is 0.52. Overlapping area represents the amount of risk that can be diversified away by holding AddLife AB and Fenix Outdoor International in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fenix Outdoor Intern 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 Fenix Outdoor. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fenix Outdoor Intern has no effect on the direction of AddLife AB i.e., AddLife AB and Fenix Outdoor go up and down completely randomly.
Pair Corralation between AddLife AB and Fenix Outdoor
Assuming the 90 days trading horizon AddLife AB is expected to generate 1.14 times more return on investment than Fenix Outdoor. However, AddLife AB is 1.14 times more volatile than Fenix Outdoor International. It trades about 0.06 of its potential returns per unit of risk. Fenix Outdoor International is currently generating about -0.02 per unit of risk. If you would invest 11,660 in AddLife AB on September 5, 2024 and sell it today you would earn a total of 1,640 from holding AddLife AB or generate 14.07% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
AddLife AB vs. Fenix Outdoor International
Performance |
| Timeline |
| AddLife AB |
| Fenix Outdoor Intern |
AddLife AB and Fenix Outdoor Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with AddLife AB and Fenix Outdoor
The main advantage of trading using opposite AddLife AB and Fenix Outdoor positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AddLife AB position performs unexpectedly, Fenix Outdoor 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 Fenix Outdoor will offset losses from the drop in Fenix Outdoor'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 |
| Fenix Outdoor vs. Thule Group AB | Fenix Outdoor vs. Nolato AB | Fenix Outdoor vs. Holmen AB | Fenix Outdoor vs. Troax Group 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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
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