Correlation Between Alimak Hek and Rejlers AB
Can any of the company-specific risk be diversified away by investing in both Alimak Hek and Rejlers 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 Rejlers 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 Rejlers AB, you can compare the effects of market volatilities on Alimak Hek and Rejlers 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 Rejlers AB. Check out your portfolio center. Please also check ongoing floating volatility patterns of Alimak Hek and Rejlers AB.
Diversification Opportunities for Alimak Hek and Rejlers AB
-0.4 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Alimak and Rejlers is -0.4. Overlapping area represents the amount of risk that can be diversified away by holding Alimak Hek Group and Rejlers AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Rejlers 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 Rejlers AB. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Rejlers AB has no effect on the direction of Alimak Hek i.e., Alimak Hek and Rejlers AB go up and down completely randomly.
Pair Corralation between Alimak Hek and Rejlers AB
Assuming the 90 days trading horizon Alimak Hek Group is expected to generate 1.21 times more return on investment than Rejlers AB. However, Alimak Hek is 1.21 times more volatile than Rejlers AB. It trades about 0.05 of its potential returns per unit of risk. Rejlers AB is currently generating about -0.35 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 Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Alimak Hek Group vs. Rejlers AB
Performance |
| Timeline |
| Alimak Hek Group |
| Rejlers AB |
Alimak Hek and Rejlers AB Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Alimak Hek and Rejlers AB
The main advantage of trading using opposite Alimak Hek and Rejlers AB positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Alimak Hek position performs unexpectedly, Rejlers 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 Rejlers AB will offset losses from the drop in Rejlers 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 |
| Rejlers AB vs. Proact IT Group | Rejlers AB vs. Nederman Holding AB | Rejlers AB vs. Sweco AB | Rejlers AB vs. Rottneros 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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.
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