Correlation Between AVTECH Sweden and AAC Clyde
Can any of the company-specific risk be diversified away by investing in both AVTECH Sweden and AAC Clyde 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 AVTECH Sweden and AAC Clyde into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between AVTECH Sweden AB and AAC Clyde Space, you can compare the effects of market volatilities on AVTECH Sweden and AAC Clyde 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 AVTECH Sweden with a short position of AAC Clyde. Check out your portfolio center. Please also check ongoing floating volatility patterns of AVTECH Sweden and AAC Clyde.
Diversification Opportunities for AVTECH Sweden and AAC Clyde
-0.71 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between AVTECH and AAC is -0.71. Overlapping area represents the amount of risk that can be diversified away by holding AVTECH Sweden AB and AAC Clyde Space in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AAC Clyde Space and AVTECH Sweden 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 AVTECH Sweden AB are associated (or correlated) with AAC Clyde. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AAC Clyde Space has no effect on the direction of AVTECH Sweden i.e., AVTECH Sweden and AAC Clyde go up and down completely randomly.
Pair Corralation between AVTECH Sweden and AAC Clyde
Assuming the 90 days trading horizon AVTECH Sweden AB is expected to under-perform the AAC Clyde. But the stock apears to be less risky and, when comparing its historical volatility, AVTECH Sweden AB is 1.39 times less risky than AAC Clyde. The stock trades about -0.15 of its potential returns per unit of risk. The AAC Clyde Space is currently generating about 0.13 of returns per unit of risk over similar time horizon. If you would invest 3,550 in AAC Clyde Space on September 2, 2024 and sell it today you would earn a total of 1,250 from holding AAC Clyde Space or generate 35.21% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
AVTECH Sweden AB vs. AAC Clyde Space
Performance |
| Timeline |
| AVTECH Sweden AB |
| AAC Clyde Space |
AVTECH Sweden and AAC Clyde Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with AVTECH Sweden and AAC Clyde
The main advantage of trading using opposite AVTECH Sweden and AAC Clyde positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AVTECH Sweden position performs unexpectedly, AAC Clyde 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 AAC Clyde will offset losses from the drop in AAC Clyde's long position.| AVTECH Sweden vs. AroCell AB | AVTECH Sweden vs. aXichem AB | AVTECH Sweden vs. Gaming Corps AB | AVTECH Sweden vs. Alelion Energy Systems |
| AAC Clyde vs. GomSpace Group AB | AAC Clyde vs. Eolus Vind AB | AAC Clyde vs. Fingerprint Cards AB | AAC Clyde vs. SaltX Technology Holding |
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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