Correlation Between Autoliv and Nordic Asia
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By analyzing existing cross correlation between Autoliv and Nordic Asia Investment, you can compare the effects of market volatilities on Autoliv and Nordic Asia 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 Autoliv with a short position of Nordic Asia. Check out your portfolio center. Please also check ongoing floating volatility patterns of Autoliv and Nordic Asia.
Diversification Opportunities for Autoliv and Nordic Asia
-0.51 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Autoliv and Nordic is -0.51. Overlapping area represents the amount of risk that can be diversified away by holding Autoliv and Nordic Asia Investment in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nordic Asia Investment and Autoliv 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 Autoliv are associated (or correlated) with Nordic Asia. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nordic Asia Investment has no effect on the direction of Autoliv i.e., Autoliv and Nordic Asia go up and down completely randomly.
Pair Corralation between Autoliv and Nordic Asia
Assuming the 90 days trading horizon Autoliv is expected to generate 0.9 times more return on investment than Nordic Asia. However, Autoliv is 1.11 times less risky than Nordic Asia. It trades about 0.26 of its potential returns per unit of risk. Nordic Asia Investment is currently generating about -0.04 per unit of risk. If you would invest 99,220 in Autoliv on September 1, 2024 and sell it today you would earn a total of 8,780 from holding Autoliv or generate 8.85% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 95.65% |
| Values | Daily Returns |
Autoliv vs. Nordic Asia Investment
Performance |
| Timeline |
| Autoliv |
| Nordic Asia Investment |
Autoliv and Nordic Asia Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Autoliv and Nordic Asia
The main advantage of trading using opposite Autoliv and Nordic Asia positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Autoliv position performs unexpectedly, Nordic Asia 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 Nordic Asia will offset losses from the drop in Nordic Asia's long position.The idea behind Autoliv and Nordic Asia Investment 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.| Nordic Asia vs. Investor AB ser | Nordic Asia vs. Industrivarden AB ser | Nordic Asia vs. Tele2 AB | Nordic Asia vs. Boliden 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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.
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