Correlation Between ALM Equity and Duni AB
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By analyzing existing cross correlation between ALM Equity AB and Duni AB, you can compare the effects of market volatilities on ALM Equity and Duni 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 ALM Equity with a short position of Duni AB. Check out your portfolio center. Please also check ongoing floating volatility patterns of ALM Equity and Duni AB.
Diversification Opportunities for ALM Equity and Duni AB
0.65 | Correlation Coefficient |
Poor diversification
The 3 months correlation between ALM and Duni is 0.65. Overlapping area represents the amount of risk that can be diversified away by holding ALM Equity AB and Duni AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Duni AB and ALM Equity 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 ALM Equity AB are associated (or correlated) with Duni AB. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Duni AB has no effect on the direction of ALM Equity i.e., ALM Equity and Duni AB go up and down completely randomly.
Pair Corralation between ALM Equity and Duni AB
Assuming the 90 days trading horizon ALM Equity AB is expected to generate 0.72 times more return on investment than Duni AB. However, ALM Equity AB is 1.39 times less risky than Duni AB. It trades about -0.12 of its potential returns per unit of risk. Duni AB is currently generating about -0.26 per unit of risk. If you would invest 8,990 in ALM Equity AB on September 2, 2024 and sell it today you would lose (170.00) from holding ALM Equity AB or give up 1.89% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
ALM Equity AB vs. Duni AB
Performance |
| Timeline |
| ALM Equity AB |
| Duni AB |
ALM Equity and Duni AB Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ALM Equity and Duni AB
The main advantage of trading using opposite ALM Equity and Duni AB positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ALM Equity position performs unexpectedly, Duni 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 Duni AB will offset losses from the drop in Duni AB's long position.| ALM Equity vs. Vitec Software Group | ALM Equity vs. Lundin Mining | ALM Equity vs. Neola Medical AB | ALM Equity vs. Scandic Hotels Group |
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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..
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