Correlation Between Alimak Hek and Cloetta AB
Can any of the company-specific risk be diversified away by investing in both Alimak Hek and Cloetta AB 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 Alimak Hek and Cloetta AB into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Alimak Hek Group and Cloetta AB, you can compare the effects of market volatilities on Alimak Hek and Cloetta 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 Alimak Hek with a short position of Cloetta AB. Check out your portfolio center. Please also check ongoing floating volatility patterns of Alimak Hek and Cloetta AB.
Diversification Opportunities for Alimak Hek and Cloetta AB
0.88 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Alimak and Cloetta is 0.88. Overlapping area represents the amount of risk that can be diversified away by holding Alimak Hek Group and Cloetta AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cloetta AB and Alimak Hek 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 Alimak Hek Group are associated (or correlated) with Cloetta AB. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cloetta AB has no effect on the direction of Alimak Hek i.e., Alimak Hek and Cloetta AB go up and down completely randomly.
Pair Corralation between Alimak Hek and Cloetta AB
Assuming the 90 days trading horizon Alimak Hek Group is expected to generate 1.44 times more return on investment than Cloetta AB. However, Alimak Hek is 1.44 times more volatile than Cloetta AB. It trades about 0.05 of its potential returns per unit of risk. Cloetta AB is currently generating about -0.26 per unit of risk. If you would invest 11,680 in Alimak Hek Group on August 29, 2024 and sell it today you would earn a total of 160.00 from holding Alimak Hek Group or generate 1.37% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Alimak Hek Group vs. Cloetta AB
Performance |
| Timeline |
| Alimak Hek Group |
| Cloetta AB |
Alimak Hek and Cloetta AB Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Alimak Hek and Cloetta AB
The main advantage of trading using opposite Alimak Hek and Cloetta AB positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Alimak Hek position performs unexpectedly, Cloetta 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 Cloetta AB will offset losses from the drop in Cloetta AB's long position.| Alimak Hek vs. Inwido AB | Alimak Hek vs. Bufab Holding AB | Alimak Hek vs. Cloetta AB | Alimak Hek vs. Dometic Group AB |
| Cloetta AB vs. Securitas AB | Cloetta AB vs. Clas Ohlson AB | Cloetta AB vs. Axfood AB | Cloetta AB vs. Byggmax 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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.
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