Correlation Between Avensia Publ and Svenska Aerogel
Can any of the company-specific risk be diversified away by investing in both Avensia Publ and Svenska Aerogel 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 Avensia Publ and Svenska Aerogel into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Avensia publ AB and Svenska Aerogel Holding, you can compare the effects of market volatilities on Avensia Publ and Svenska Aerogel 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 Avensia Publ with a short position of Svenska Aerogel. Check out your portfolio center. Please also check ongoing floating volatility patterns of Avensia Publ and Svenska Aerogel.
Diversification Opportunities for Avensia Publ and Svenska Aerogel
0.38 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Avensia and Svenska is 0.38. Overlapping area represents the amount of risk that can be diversified away by holding Avensia publ AB and Svenska Aerogel Holding in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Svenska Aerogel Holding and Avensia Publ 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 Avensia publ AB are associated (or correlated) with Svenska Aerogel. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Svenska Aerogel Holding has no effect on the direction of Avensia Publ i.e., Avensia Publ and Svenska Aerogel go up and down completely randomly.
Pair Corralation between Avensia Publ and Svenska Aerogel
Assuming the 90 days trading horizon Avensia Publ is expected to generate 12.42 times less return on investment than Svenska Aerogel. But when comparing it to its historical volatility, Avensia publ AB is 5.85 times less risky than Svenska Aerogel. It trades about 0.06 of its potential returns per unit of risk. Svenska Aerogel Holding is currently generating about 0.13 of returns per unit of risk over similar time horizon. If you would invest 835.00 in Svenska Aerogel Holding on September 3, 2024 and sell it today you would earn a total of 175.00 from holding Svenska Aerogel Holding or generate 20.96% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Avensia publ AB vs. Svenska Aerogel Holding
Performance |
| Timeline |
| Avensia publ AB |
| Svenska Aerogel Holding |
Avensia Publ and Svenska Aerogel Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Avensia Publ and Svenska Aerogel
The main advantage of trading using opposite Avensia Publ and Svenska Aerogel positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Avensia Publ position performs unexpectedly, Svenska Aerogel 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 Svenska Aerogel will offset losses from the drop in Svenska Aerogel's long position.| Avensia Publ vs. Svenska Aerogel Holding | Avensia Publ vs. Acarix AS | Avensia Publ vs. Clean Motion AB | Avensia Publ vs. AroCell AB |
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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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.
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