Correlation Between AVTECH Sweden and COOR Service
Can any of the company-specific risk be diversified away by investing in both AVTECH Sweden 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 AVTECH Sweden and COOR Service 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 COOR Service Management, you can compare the effects of market volatilities on AVTECH Sweden 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 AVTECH Sweden with a short position of COOR Service. Check out your portfolio center. Please also check ongoing floating volatility patterns of AVTECH Sweden and COOR Service.
Diversification Opportunities for AVTECH Sweden and COOR Service
0.81 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between AVTECH and COOR is 0.81. Overlapping area represents the amount of risk that can be diversified away by holding AVTECH Sweden AB 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 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 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 AVTECH Sweden i.e., AVTECH Sweden and COOR Service go up and down completely randomly.
Pair Corralation between AVTECH Sweden and COOR Service
Assuming the 90 days trading horizon AVTECH Sweden AB is expected to generate 2.15 times more return on investment than COOR Service. However, AVTECH Sweden is 2.15 times more volatile than COOR Service Management. It trades about -0.12 of its potential returns per unit of risk. COOR Service Management is currently generating about -0.28 per unit of risk. If you would invest 442.00 in AVTECH Sweden AB on August 29, 2024 and sell it today you would lose (47.00) from holding AVTECH Sweden AB or give up 10.63% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
AVTECH Sweden AB vs. COOR Service Management
Performance |
| Timeline |
| AVTECH Sweden AB |
| COOR Service Management |
AVTECH Sweden and COOR Service Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with AVTECH Sweden and COOR Service
The main advantage of trading using opposite AVTECH Sweden and COOR Service positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AVTECH Sweden 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.| AVTECH Sweden vs. AroCell AB | AVTECH Sweden vs. aXichem AB | AVTECH Sweden vs. Gaming Corps AB | AVTECH Sweden vs. Alelion Energy Systems |
| 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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.
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