Correlation Between Addtech AB and Wenzhou Kangning
Can any of the company-specific risk be diversified away by investing in both Addtech AB and Wenzhou Kangning 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 Wenzhou Kangning into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Addtech AB and Wenzhou Kangning Hospital, you can compare the effects of market volatilities on Addtech AB and Wenzhou Kangning 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 Wenzhou Kangning. Check out your portfolio center. Please also check ongoing floating volatility patterns of Addtech AB and Wenzhou Kangning.
Diversification Opportunities for Addtech AB and Wenzhou Kangning
-0.24 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Addtech and Wenzhou is -0.24. Overlapping area represents the amount of risk that can be diversified away by holding Addtech AB and Wenzhou Kangning Hospital in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Wenzhou Kangning Hospital 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 Wenzhou Kangning. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Wenzhou Kangning Hospital has no effect on the direction of Addtech AB i.e., Addtech AB and Wenzhou Kangning go up and down completely randomly.
Pair Corralation between Addtech AB and Wenzhou Kangning
Assuming the 90 days trading horizon Addtech AB is expected to generate 0.79 times more return on investment than Wenzhou Kangning. However, Addtech AB is 1.27 times less risky than Wenzhou Kangning. It trades about 0.12 of its potential returns per unit of risk. Wenzhou Kangning Hospital is currently generating about -0.22 per unit of risk. If you would invest 2,654 in Addtech AB on November 6, 2024 and sell it today you would earn a total of 124.00 from holding Addtech AB or generate 4.67% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Addtech AB vs. Wenzhou Kangning Hospital
Performance |
| Timeline |
| Addtech AB |
| Wenzhou Kangning Hospital |
Addtech AB and Wenzhou Kangning Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Addtech AB and Wenzhou Kangning
The main advantage of trading using opposite Addtech AB and Wenzhou Kangning positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Addtech AB position performs unexpectedly, Wenzhou Kangning 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 Wenzhou Kangning will offset losses from the drop in Wenzhou Kangning's long position.| Addtech AB vs. STORE ELECTRONIC | Addtech AB vs. USU Software AG | Addtech AB vs. Guidewire Software | Addtech AB vs. Unity Software |
| Wenzhou Kangning vs. SIVERS SEMICONDUCTORS AB | Wenzhou Kangning vs. NorAm Drilling AS | Wenzhou Kangning vs. Volkswagen AG | Wenzhou Kangning vs. Darden Restaurants |
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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
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