Correlation Between Addtech AB and Focus Home
Can any of the company-specific risk be diversified away by investing in both Addtech AB and Focus Home 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 Addtech AB and Focus Home into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Addtech AB and Focus Home Interactive, you can compare the effects of market volatilities on Addtech AB and Focus Home 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 Addtech AB with a short position of Focus Home. Check out your portfolio center. Please also check ongoing floating volatility patterns of Addtech AB and Focus Home.
Diversification Opportunities for Addtech AB and Focus Home
0.15 | Correlation Coefficient |
Average diversification
The 3 months correlation between Addtech and Focus is 0.15. Overlapping area represents the amount of risk that can be diversified away by holding Addtech AB and Focus Home Interactive in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Focus Home Interactive and Addtech AB 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 Addtech AB are associated (or correlated) with Focus Home. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Focus Home Interactive has no effect on the direction of Addtech AB i.e., Addtech AB and Focus Home go up and down completely randomly.
Pair Corralation between Addtech AB and Focus Home
Assuming the 90 days trading horizon Addtech AB is expected to under-perform the Focus Home. But the stock apears to be less risky and, when comparing its historical volatility, Addtech AB is 3.01 times less risky than Focus Home. The stock trades about -0.27 of its potential returns per unit of risk. The Focus Home Interactive is currently generating about 0.17 of returns per unit of risk over similar time horizon. If you would invest 1,916 in Focus Home Interactive on October 17, 2024 and sell it today you would earn a total of 214.00 from holding Focus Home Interactive or generate 11.17% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 94.44% |
| Values | Daily Returns |
Addtech AB vs. Focus Home Interactive
Performance |
| Timeline |
| Addtech AB |
| Focus Home Interactive |
Addtech AB and Focus Home Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Addtech AB and Focus Home
The main advantage of trading using opposite Addtech AB and Focus Home positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Addtech AB position performs unexpectedly, Focus Home 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 Focus Home will offset losses from the drop in Focus Home's long position.| Addtech AB vs. COREBRIDGE FINANCIAL INC | Addtech AB vs. ScanSource | Addtech AB vs. Highlight Communications AG | Addtech AB vs. Rocket Internet SE |
| Focus Home vs. SQUIRREL MEDIA SA | Focus Home vs. Agilent Technologies | Focus Home vs. Addtech AB | Focus Home vs. Townsquare Media |
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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.
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