Correlation Between Addnode Group and Inwido AB
Can any of the company-specific risk be diversified away by investing in both Addnode Group and Inwido 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 Addnode Group and Inwido AB into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Addnode Group AB and Inwido AB, you can compare the effects of market volatilities on Addnode Group and Inwido 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 Addnode Group with a short position of Inwido AB. Check out your portfolio center. Please also check ongoing floating volatility patterns of Addnode Group and Inwido AB.
Diversification Opportunities for Addnode Group and Inwido AB
0.76 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Addnode and Inwido is 0.76. Overlapping area represents the amount of risk that can be diversified away by holding Addnode Group AB and Inwido AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Inwido AB and Addnode Group 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 Addnode Group AB are associated (or correlated) with Inwido AB. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Inwido AB has no effect on the direction of Addnode Group i.e., Addnode Group and Inwido AB go up and down completely randomly.
Pair Corralation between Addnode Group and Inwido AB
Assuming the 90 days trading horizon Addnode Group AB is expected to generate 1.79 times more return on investment than Inwido AB. However, Addnode Group is 1.79 times more volatile than Inwido AB. It trades about 0.1 of its potential returns per unit of risk. Inwido AB is currently generating about 0.09 per unit of risk. If you would invest 10,400 in Addnode Group AB on November 6, 2024 and sell it today you would earn a total of 1,470 from holding Addnode Group AB or generate 14.13% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Addnode Group AB vs. Inwido AB
Performance |
| Timeline |
| Addnode Group AB |
| Inwido AB |
Addnode Group and Inwido AB Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Addnode Group and Inwido AB
The main advantage of trading using opposite Addnode Group and Inwido AB positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Addnode Group position performs unexpectedly, Inwido 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 Inwido AB will offset losses from the drop in Inwido AB's long position.| Addnode Group vs. Lagercrantz Group AB | Addnode Group vs. Addtech AB | Addnode Group vs. Vitec Software Group | Addnode Group vs. AddLife AB |
| Inwido AB vs. FormPipe Software AB | Inwido AB vs. MTI Investment SE | Inwido AB vs. High Coast Distillery | Inwido AB vs. Sdiptech 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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.
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