Correlation Between Avanza Bank and Awardit AB
Can any of the company-specific risk be diversified away by investing in both Avanza Bank and Awardit AB 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 Avanza Bank and Awardit AB into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Avanza Bank Holding and Awardit AB, you can compare the effects of market volatilities on Avanza Bank and Awardit AB 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 Avanza Bank with a short position of Awardit AB. Check out your portfolio center. Please also check ongoing floating volatility patterns of Avanza Bank and Awardit AB.
Diversification Opportunities for Avanza Bank and Awardit AB
-0.56 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Avanza and Awardit is -0.56. Overlapping area represents the amount of risk that can be diversified away by holding Avanza Bank Holding and Awardit AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Awardit AB and Avanza Bank 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 Avanza Bank Holding are associated (or correlated) with Awardit AB. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Awardit AB has no effect on the direction of Avanza Bank i.e., Avanza Bank and Awardit AB go up and down completely randomly.
Pair Corralation between Avanza Bank and Awardit AB
Assuming the 90 days trading horizon Avanza Bank Holding is expected to generate 0.78 times more return on investment than Awardit AB. However, Avanza Bank Holding is 1.28 times less risky than Awardit AB. It trades about 0.07 of its potential returns per unit of risk. Awardit AB is currently generating about -0.04 per unit of risk. If you would invest 22,180 in Avanza Bank Holding on August 31, 2024 and sell it today you would earn a total of 400.00 from holding Avanza Bank Holding or generate 1.8% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Avanza Bank Holding vs. Awardit AB
Performance |
| Timeline |
| Avanza Bank Holding |
| Awardit AB |
Avanza Bank and Awardit AB Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Avanza Bank and Awardit AB
The main advantage of trading using opposite Avanza Bank and Awardit AB positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Avanza Bank position performs unexpectedly, Awardit AB 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 Awardit AB will offset losses from the drop in Awardit AB's long position.| Avanza Bank vs. Axfood AB | Avanza Bank vs. Samhllsbyggnadsbolaget i Norden | Avanza Bank vs. Castellum AB | Avanza Bank vs. Investor AB ser |
| Awardit AB vs. Neola Medical AB | Awardit AB vs. TradeDoubler AB | Awardit AB vs. Svenska Handelsbanken AB | Awardit AB vs. Avanza Bank 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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
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