Correlation Between Avensia Publ and Kentima Holding
Can any of the company-specific risk be diversified away by investing in both Avensia Publ and Kentima Holding 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 Kentima Holding 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 Kentima Holding publ, you can compare the effects of market volatilities on Avensia Publ and Kentima Holding 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 Kentima Holding. Check out your portfolio center. Please also check ongoing floating volatility patterns of Avensia Publ and Kentima Holding.
Diversification Opportunities for Avensia Publ and Kentima Holding
-0.11 | Correlation Coefficient |
Good diversification
The 3 months correlation between Avensia and Kentima is -0.11. Overlapping area represents the amount of risk that can be diversified away by holding Avensia publ AB and Kentima Holding publ in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kentima Holding publ 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 Kentima Holding. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kentima Holding publ has no effect on the direction of Avensia Publ i.e., Avensia Publ and Kentima Holding go up and down completely randomly.
Pair Corralation between Avensia Publ and Kentima Holding
Assuming the 90 days trading horizon Avensia publ AB is expected to under-perform the Kentima Holding. But the stock apears to be less risky and, when comparing its historical volatility, Avensia publ AB is 1.78 times less risky than Kentima Holding. The stock trades about -0.02 of its potential returns per unit of risk. The Kentima Holding publ is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest 268.00 in Kentima Holding publ on September 5, 2024 and sell it today you would lose (56.00) from holding Kentima Holding publ or give up 20.9% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Avensia publ AB vs. Kentima Holding publ
Performance |
| Timeline |
| Avensia publ AB |
| Kentima Holding publ |
Avensia Publ and Kentima Holding Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Avensia Publ and Kentima Holding
The main advantage of trading using opposite Avensia Publ and Kentima Holding positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Avensia Publ position performs unexpectedly, Kentima Holding 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 Kentima Holding will offset losses from the drop in Kentima Holding's long position.| Avensia Publ vs. FormPipe Software AB | Avensia Publ vs. Micro Systemation AB | Avensia Publ vs. CTT Systems AB | Avensia Publ vs. CAG Group AB |
| Kentima Holding vs. Generic Sweden publ | Kentima Holding vs. Diadrom Holding AB | Kentima Holding vs. JLT Mobile Computers | Kentima Holding vs. Avensia publ 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 Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.
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