Correlation Between AVTECH Sweden and Vitrolife
Can any of the company-specific risk be diversified away by investing in both AVTECH Sweden and Vitrolife 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 Vitrolife 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 Vitrolife AB, you can compare the effects of market volatilities on AVTECH Sweden and Vitrolife 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 Vitrolife. Check out your portfolio center. Please also check ongoing floating volatility patterns of AVTECH Sweden and Vitrolife.
Diversification Opportunities for AVTECH Sweden and Vitrolife
0.86 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between AVTECH and Vitrolife is 0.86. Overlapping area represents the amount of risk that can be diversified away by holding AVTECH Sweden AB and Vitrolife AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Vitrolife AB 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 Vitrolife. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Vitrolife AB has no effect on the direction of AVTECH Sweden i.e., AVTECH Sweden and Vitrolife go up and down completely randomly.
Pair Corralation between AVTECH Sweden and Vitrolife
Assuming the 90 days trading horizon AVTECH Sweden AB is expected to generate 1.27 times more return on investment than Vitrolife. However, AVTECH Sweden is 1.27 times more volatile than Vitrolife AB. It trades about 0.03 of its potential returns per unit of risk. Vitrolife AB is currently generating about 0.03 per unit of risk. If you would invest 294.00 in AVTECH Sweden AB on September 3, 2024 and sell it today you would earn a total of 101.00 from holding AVTECH Sweden AB or generate 34.35% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
AVTECH Sweden AB vs. Vitrolife AB
Performance |
| Timeline |
| AVTECH Sweden AB |
| Vitrolife AB |
AVTECH Sweden and Vitrolife Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with AVTECH Sweden and Vitrolife
The main advantage of trading using opposite AVTECH Sweden and Vitrolife positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AVTECH Sweden position performs unexpectedly, Vitrolife 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 Vitrolife will offset losses from the drop in Vitrolife'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 |
| Vitrolife vs. FormPipe Software AB | Vitrolife vs. Soder Sportfiske AB | Vitrolife vs. 24SevenOffice Scandinavia AB | Vitrolife vs. AVTECH Sweden 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 Equity Valuation module to check real value of public entities based on technical and fundamental data.
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