Correlation Between AQ Group and Inwido AB
Can any of the company-specific risk be diversified away by investing in both AQ 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 AQ 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 AQ Group AB and Inwido AB, you can compare the effects of market volatilities on AQ 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 AQ Group with a short position of Inwido AB. Check out your portfolio center. Please also check ongoing floating volatility patterns of AQ Group and Inwido AB.
Diversification Opportunities for AQ Group and Inwido AB
Very weak diversification
The 3 months correlation between AQ Group and Inwido is 0.51. Overlapping area represents the amount of risk that can be diversified away by holding AQ 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 AQ 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 AQ 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 AQ Group i.e., AQ Group and Inwido AB go up and down completely randomly.
Pair Corralation between AQ Group and Inwido AB
Assuming the 90 days horizon AQ Group is expected to generate 1.45 times less return on investment than Inwido AB. In addition to that, AQ Group is 1.09 times more volatile than Inwido AB. It trades about 0.06 of its total potential returns per unit of risk. Inwido AB is currently generating about 0.1 per unit of volatility. If you would invest 9,384 in Inwido AB on August 31, 2024 and sell it today you would earn a total of 8,916 from holding Inwido AB or generate 95.01% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 99.75% |
| Values | Daily Returns |
AQ Group AB vs. Inwido AB
Performance |
| Timeline |
| AQ Group AB |
| Inwido AB |
AQ Group and Inwido AB Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with AQ Group and Inwido AB
The main advantage of trading using opposite AQ Group and Inwido AB positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AQ 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.| AQ Group vs. Inwido AB | AQ Group vs. Bufab Holding AB | AQ Group vs. Beijer Alma AB | AQ Group vs. Addtech AB |
| Inwido AB vs. Scandinavian ChemoTech AB | Inwido AB vs. Addtech AB | Inwido AB vs. Sdiptech AB | Inwido AB vs. G5 Entertainment publ |
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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.
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