Correlation Between AVTECH Sweden and RaySearch Laboratories
Can any of the company-specific risk be diversified away by investing in both AVTECH Sweden and RaySearch Laboratories 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 RaySearch Laboratories 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 RaySearch Laboratories AB, you can compare the effects of market volatilities on AVTECH Sweden and RaySearch Laboratories 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 RaySearch Laboratories. Check out your portfolio center. Please also check ongoing floating volatility patterns of AVTECH Sweden and RaySearch Laboratories.
Diversification Opportunities for AVTECH Sweden and RaySearch Laboratories
-0.13 | Correlation Coefficient |
Good diversification
The 3 months correlation between AVTECH and RaySearch is -0.13. Overlapping area represents the amount of risk that can be diversified away by holding AVTECH Sweden AB and RaySearch Laboratories AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on RaySearch Laboratories 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 RaySearch Laboratories. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of RaySearch Laboratories has no effect on the direction of AVTECH Sweden i.e., AVTECH Sweden and RaySearch Laboratories go up and down completely randomly.
Pair Corralation between AVTECH Sweden and RaySearch Laboratories
Assuming the 90 days trading horizon AVTECH Sweden is expected to generate 1.09 times less return on investment than RaySearch Laboratories. In addition to that, AVTECH Sweden is 1.4 times more volatile than RaySearch Laboratories AB. It trades about 0.07 of its total potential returns per unit of risk. RaySearch Laboratories AB is currently generating about 0.1 per unit of volatility. If you would invest 9,455 in RaySearch Laboratories AB on January 22, 2025 and sell it today you would earn a total of 13,845 from holding RaySearch Laboratories AB or generate 146.43% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
AVTECH Sweden AB vs. RaySearch Laboratories AB
Performance |
| Timeline |
| AVTECH Sweden AB |
| RaySearch Laboratories |
AVTECH Sweden and RaySearch Laboratories Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with AVTECH Sweden and RaySearch Laboratories
The main advantage of trading using opposite AVTECH Sweden and RaySearch Laboratories positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AVTECH Sweden position performs unexpectedly, RaySearch Laboratories 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 RaySearch Laboratories will offset losses from the drop in RaySearch Laboratories' long position.| AVTECH Sweden vs. AroCell AB | AVTECH Sweden vs. aXichem AB | AVTECH Sweden vs. Gaming Corps AB | AVTECH Sweden vs. Cantargia AB |
| RaySearch Laboratories vs. Elekta AB | RaySearch Laboratories vs. Vitrolife AB | RaySearch Laboratories vs. CellaVision AB | RaySearch Laboratories vs. Biotage 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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
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