Correlation Between Avanza Bank and Readly International
Can any of the company-specific risk be diversified away by investing in both Avanza Bank and Readly International 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 Readly International 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 Readly International AB, you can compare the effects of market volatilities on Avanza Bank and Readly International 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 Readly International. Check out your portfolio center. Please also check ongoing floating volatility patterns of Avanza Bank and Readly International.
Diversification Opportunities for Avanza Bank and Readly International
-0.15 | Correlation Coefficient |
Good diversification
The 3 months correlation between Avanza and Readly is -0.15. Overlapping area represents the amount of risk that can be diversified away by holding Avanza Bank Holding and Readly International AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Readly International 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 Readly International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Readly International has no effect on the direction of Avanza Bank i.e., Avanza Bank and Readly International go up and down completely randomly.
Pair Corralation between Avanza Bank and Readly International
Assuming the 90 days trading horizon Avanza Bank Holding is expected to generate 0.69 times more return on investment than Readly International. However, Avanza Bank Holding is 1.45 times less risky than Readly International. It trades about 0.59 of its potential returns per unit of risk. Readly International AB is currently generating about 0.06 per unit of risk. If you would invest 26,740 in Avanza Bank Holding on October 22, 2024 and sell it today you would earn a total of 2,140 from holding Avanza Bank Holding or generate 8.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Avanza Bank Holding vs. Readly International AB
Performance |
| Timeline |
| Avanza Bank Holding |
| Readly International |
Avanza Bank and Readly International Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Avanza Bank and Readly International
The main advantage of trading using opposite Avanza Bank and Readly International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Avanza Bank position performs unexpectedly, Readly International 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 Readly International will offset losses from the drop in Readly International'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 |
| Readly International vs. Storytel AB | Readly International vs. Stillfront Group AB | Readly International vs. Millicom International Cellular | Readly International vs. Boozt 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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.
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