Correlation Between Anoto Group and Northbaze Group
Can any of the company-specific risk be diversified away by investing in both Anoto Group and Northbaze Group 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 Anoto Group and Northbaze Group into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Anoto Group AB and Northbaze Group AB, you can compare the effects of market volatilities on Anoto Group and Northbaze Group 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 Anoto Group with a short position of Northbaze Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of Anoto Group and Northbaze Group.
Diversification Opportunities for Anoto Group and Northbaze Group
0.35 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Anoto and Northbaze is 0.35. Overlapping area represents the amount of risk that can be diversified away by holding Anoto Group AB and Northbaze Group AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Northbaze Group AB and Anoto 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 Anoto Group AB are associated (or correlated) with Northbaze Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Northbaze Group AB has no effect on the direction of Anoto Group i.e., Anoto Group and Northbaze Group go up and down completely randomly.
Pair Corralation between Anoto Group and Northbaze Group
Assuming the 90 days trading horizon Anoto Group AB is expected to under-perform the Northbaze Group. But the stock apears to be less risky and, when comparing its historical volatility, Anoto Group AB is 2.1 times less risky than Northbaze Group. The stock trades about -0.22 of its potential returns per unit of risk. The Northbaze Group AB is currently generating about 0.0 of returns per unit of risk over similar time horizon. If you would invest 22.00 in Northbaze Group AB on September 5, 2024 and sell it today you would lose (5.00) from holding Northbaze Group AB or give up 22.73% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Anoto Group AB vs. Northbaze Group AB
Performance |
| Timeline |
| Anoto Group AB |
| Northbaze Group AB |
Anoto Group and Northbaze Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Anoto Group and Northbaze Group
The main advantage of trading using opposite Anoto Group and Northbaze Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Anoto Group position performs unexpectedly, Northbaze Group 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 Northbaze Group will offset losses from the drop in Northbaze Group's long position.| Anoto Group vs. Novotek AB | Anoto Group vs. Addnode Group AB | Anoto Group vs. Softronic AB | Anoto Group vs. CTT Systems AB |
| Northbaze Group vs. Anoto Group AB | Northbaze Group vs. Bong AB | Northbaze Group vs. Episurf Medical AB | Northbaze Group vs. Eniro 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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.
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