Correlation Between Alimak Hek and Norva24 Group
Can any of the company-specific risk be diversified away by investing in both Alimak Hek and Norva24 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 Alimak Hek and Norva24 Group 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 Norva24 Group AB, you can compare the effects of market volatilities on Alimak Hek and Norva24 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 Alimak Hek with a short position of Norva24 Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of Alimak Hek and Norva24 Group.
Diversification Opportunities for Alimak Hek and Norva24 Group
-0.35 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Alimak and Norva24 is -0.35. Overlapping area represents the amount of risk that can be diversified away by holding Alimak Hek Group and Norva24 Group AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Norva24 Group 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 Norva24 Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Norva24 Group AB has no effect on the direction of Alimak Hek i.e., Alimak Hek and Norva24 Group go up and down completely randomly.
Pair Corralation between Alimak Hek and Norva24 Group
Assuming the 90 days trading horizon Alimak Hek Group is expected to generate 0.52 times more return on investment than Norva24 Group. However, Alimak Hek Group is 1.94 times less risky than Norva24 Group. It trades about -0.07 of its potential returns per unit of risk. Norva24 Group AB is currently generating about -0.13 per unit of risk. If you would invest 12,220 in Alimak Hek Group on September 1, 2024 and sell it today you would lose (280.00) from holding Alimak Hek Group or give up 2.29% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Alimak Hek Group vs. Norva24 Group AB
Performance |
| Timeline |
| Alimak Hek Group |
| Norva24 Group AB |
Alimak Hek and Norva24 Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Alimak Hek and Norva24 Group
The main advantage of trading using opposite Alimak Hek and Norva24 Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Alimak Hek position performs unexpectedly, Norva24 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 Norva24 Group will offset losses from the drop in Norva24 Group's long position.| Alimak Hek vs. Samhllsbyggnadsbolaget i Norden | Alimak Hek vs. Sinch AB | Alimak Hek vs. Embracer Group AB | Alimak Hek vs. Evolution AB |
| Norva24 Group vs. Minesto AB | Norva24 Group vs. Sivers IMA Holding | Norva24 Group vs. SolTech Energy Sweden | Norva24 Group vs. AAC Clyde Space |
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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
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