Correlation Between Arctic Blue and COOR Service
Can any of the company-specific risk be diversified away by investing in both Arctic Blue and COOR Service 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 Arctic Blue and COOR Service into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Arctic Blue Beverages and COOR Service Management, you can compare the effects of market volatilities on Arctic Blue and COOR Service 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 Arctic Blue with a short position of COOR Service. Check out your portfolio center. Please also check ongoing floating volatility patterns of Arctic Blue and COOR Service.
Diversification Opportunities for Arctic Blue and COOR Service
0.73 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Arctic and COOR is 0.73. Overlapping area represents the amount of risk that can be diversified away by holding Arctic Blue Beverages and COOR Service Management in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on COOR Service Management and Arctic Blue 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 Arctic Blue Beverages are associated (or correlated) with COOR Service. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of COOR Service Management has no effect on the direction of Arctic Blue i.e., Arctic Blue and COOR Service go up and down completely randomly.
Pair Corralation between Arctic Blue and COOR Service
Assuming the 90 days trading horizon Arctic Blue Beverages is expected to under-perform the COOR Service. In addition to that, Arctic Blue is 1.91 times more volatile than COOR Service Management. It trades about -0.44 of its total potential returns per unit of risk. COOR Service Management is currently generating about -0.28 per unit of volatility. If you would invest 3,702 in COOR Service Management on August 29, 2024 and sell it today you would lose (372.00) from holding COOR Service Management or give up 10.05% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Arctic Blue Beverages vs. COOR Service Management
Performance |
| Timeline |
| Arctic Blue Beverages |
| COOR Service Management |
Arctic Blue and COOR Service Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Arctic Blue and COOR Service
The main advantage of trading using opposite Arctic Blue and COOR Service positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Arctic Blue position performs unexpectedly, COOR Service 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 COOR Service will offset losses from the drop in COOR Service's long position.| Arctic Blue vs. Cint Group AB | Arctic Blue vs. Nordic Waterproofing Holding | Arctic Blue vs. Inwido AB | Arctic Blue vs. KABE Group AB |
| COOR Service vs. Inwido AB | COOR Service vs. Cloetta AB | COOR Service vs. Clas Ohlson AB | COOR Service vs. Bufab Holding 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 Portfolio Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
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