Correlation Between ALM Equity and IAR Systems
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By analyzing existing cross correlation between ALM Equity AB and IAR Systems Group, you can compare the effects of market volatilities on ALM Equity and IAR Systems 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 IAR Systems. Check out your portfolio center. Please also check ongoing floating volatility patterns of ALM Equity and IAR Systems.
Diversification Opportunities for ALM Equity and IAR Systems
0.39 | Correlation Coefficient |
Weak diversification
The 3 months correlation between ALM and IAR is 0.39. Overlapping area represents the amount of risk that can be diversified away by holding ALM Equity AB and IAR Systems Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on IAR Systems Group 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 IAR Systems. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of IAR Systems Group has no effect on the direction of ALM Equity i.e., ALM Equity and IAR Systems go up and down completely randomly.
Pair Corralation between ALM Equity and IAR Systems
Assuming the 90 days trading horizon ALM Equity AB is expected to generate 0.46 times more return on investment than IAR Systems. However, ALM Equity AB is 2.16 times less risky than IAR Systems. It trades about 0.05 of its potential returns per unit of risk. IAR Systems Group is currently generating about 0.0 per unit of risk. If you would invest 6,761 in ALM Equity AB on August 29, 2024 and sell it today you would earn a total of 1,949 from holding ALM Equity AB or generate 28.83% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
ALM Equity AB vs. IAR Systems Group
Performance |
| Timeline |
| ALM Equity AB |
| IAR Systems Group |
ALM Equity and IAR Systems Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ALM Equity and IAR Systems
The main advantage of trading using opposite ALM Equity and IAR Systems positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ALM Equity position performs unexpectedly, IAR Systems 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 IAR Systems will offset losses from the drop in IAR Systems' long position.| ALM Equity vs. Indutrade AB | ALM Equity vs. Invisio Communications AB | ALM Equity vs. Train Alliance Sweden | ALM Equity vs. Beowulf Mining PLC |
| IAR Systems vs. CellaVision AB | IAR Systems vs. HMS Networks AB | IAR Systems vs. Enea AB | IAR Systems vs. Know IT 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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.
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