Correlation Between Avanza Bank and Investor
Can any of the company-specific risk be diversified away by investing in both Avanza Bank and Investor 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 Investor 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 Investor AB ser, you can compare the effects of market volatilities on Avanza Bank and Investor 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 Investor. Check out your portfolio center. Please also check ongoing floating volatility patterns of Avanza Bank and Investor.
Diversification Opportunities for Avanza Bank and Investor
0.52 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Avanza and Investor is 0.52. Overlapping area represents the amount of risk that can be diversified away by holding Avanza Bank Holding and Investor AB ser in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Investor AB ser 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 Investor. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Investor AB ser has no effect on the direction of Avanza Bank i.e., Avanza Bank and Investor go up and down completely randomly.
Pair Corralation between Avanza Bank and Investor
Assuming the 90 days trading horizon Avanza Bank Holding is expected to generate 1.31 times more return on investment than Investor. However, Avanza Bank is 1.31 times more volatile than Investor AB ser. It trades about -0.11 of its potential returns per unit of risk. Investor AB ser is currently generating about -0.19 per unit of risk. If you would invest 22,610 in Avanza Bank Holding on August 29, 2024 and sell it today you would lose (660.00) from holding Avanza Bank Holding or give up 2.92% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Avanza Bank Holding vs. Investor AB ser
Performance |
| Timeline |
| Avanza Bank Holding |
| Investor AB ser |
Avanza Bank and Investor Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Avanza Bank and Investor
The main advantage of trading using opposite Avanza Bank and Investor positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Avanza Bank position performs unexpectedly, Investor 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 Investor will offset losses from the drop in Investor'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 |
| Investor vs. Kinnevik Investment AB | Investor vs. Investment AB Latour | Investor vs. Samhllsbyggnadsbolaget i Norden | Investor vs. Industrivarden AB ser |
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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.
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