Correlation Between ALM Equity and Sdiptech
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By analyzing existing cross correlation between ALM Equity AB and Sdiptech AB, you can compare the effects of market volatilities on ALM Equity and Sdiptech 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 Sdiptech. Check out your portfolio center. Please also check ongoing floating volatility patterns of ALM Equity and Sdiptech.
Diversification Opportunities for ALM Equity and Sdiptech
0.22 | Correlation Coefficient |
Modest diversification
The 3 months correlation between ALM and Sdiptech is 0.22. Overlapping area represents the amount of risk that can be diversified away by holding ALM Equity AB and Sdiptech AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sdiptech 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 Sdiptech. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sdiptech AB has no effect on the direction of ALM Equity i.e., ALM Equity and Sdiptech go up and down completely randomly.
Pair Corralation between ALM Equity and Sdiptech
Assuming the 90 days trading horizon ALM Equity AB is expected to generate 1.65 times more return on investment than Sdiptech. However, ALM Equity is 1.65 times more volatile than Sdiptech AB. It trades about 0.05 of its potential returns per unit of risk. Sdiptech AB is currently generating about 0.07 per unit of risk. If you would invest 7,175 in ALM Equity AB on August 29, 2024 and sell it today you would earn a total of 1,535 from holding ALM Equity AB or generate 21.39% 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. Sdiptech AB
Performance |
| Timeline |
| ALM Equity AB |
| Sdiptech AB |
ALM Equity and Sdiptech Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ALM Equity and Sdiptech
The main advantage of trading using opposite ALM Equity and Sdiptech positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ALM Equity position performs unexpectedly, Sdiptech 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 Sdiptech will offset losses from the drop in Sdiptech's 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 |
| Sdiptech vs. AB Sagax | Sdiptech vs. ALM Equity AB | Sdiptech vs. KABE Group AB | Sdiptech vs. IAR Systems 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 Bonds Directory module to find actively traded corporate debentures issued by US companies.
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