Correlation Between Avensia Publ and Alcadon Group
Can any of the company-specific risk be diversified away by investing in both Avensia Publ and Alcadon 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 Avensia Publ and Alcadon Group 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 Alcadon Group AB, you can compare the effects of market volatilities on Avensia Publ and Alcadon 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 Avensia Publ with a short position of Alcadon Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of Avensia Publ and Alcadon Group.
Diversification Opportunities for Avensia Publ and Alcadon Group
0.94 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Avensia and Alcadon is 0.94. Overlapping area represents the amount of risk that can be diversified away by holding Avensia publ AB and Alcadon Group AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Alcadon Group AB 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 Alcadon Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Alcadon Group AB has no effect on the direction of Avensia Publ i.e., Avensia Publ and Alcadon Group go up and down completely randomly.
Pair Corralation between Avensia Publ and Alcadon Group
Assuming the 90 days trading horizon Avensia publ AB is expected to generate 1.03 times more return on investment than Alcadon Group. However, Avensia Publ is 1.03 times more volatile than Alcadon Group AB. It trades about -0.02 of its potential returns per unit of risk. Alcadon Group AB is currently generating about -0.06 per unit of risk. If you would invest 1,300 in Avensia publ AB on August 28, 2024 and sell it today you would lose (510.00) from holding Avensia publ AB or give up 39.23% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Avensia publ AB vs. Alcadon Group AB
Performance |
| Timeline |
| Avensia publ AB |
| Alcadon Group AB |
Avensia Publ and Alcadon Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Avensia Publ and Alcadon Group
The main advantage of trading using opposite Avensia Publ and Alcadon Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Avensia Publ position performs unexpectedly, Alcadon 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 Alcadon Group will offset losses from the drop in Alcadon Group's long position.| Avensia Publ vs. Svedbergs i Dalstorp | Avensia Publ vs. Know IT AB | Avensia Publ vs. FormPipe Software AB |
| Alcadon Group vs. New Wave Group | Alcadon Group vs. Cantargia AB | Alcadon Group vs. Enea AB | Alcadon Group vs. Proact IT Group |
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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.
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