Correlation Between B3 Consulting and Novotek AB
Can any of the company-specific risk be diversified away by investing in both B3 Consulting and Novotek 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 B3 Consulting and Novotek AB into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between B3 Consulting Group and Novotek AB, you can compare the effects of market volatilities on B3 Consulting and Novotek 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 B3 Consulting with a short position of Novotek AB. Check out your portfolio center. Please also check ongoing floating volatility patterns of B3 Consulting and Novotek AB.
Diversification Opportunities for B3 Consulting and Novotek AB
-0.32 | Correlation Coefficient |
Very good diversification
The 3 months correlation between B3 Consulting and Novotek is -0.32. Overlapping area represents the amount of risk that can be diversified away by holding B3 Consulting Group and Novotek AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Novotek AB and B3 Consulting 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 B3 Consulting Group are associated (or correlated) with Novotek AB. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Novotek AB has no effect on the direction of B3 Consulting i.e., B3 Consulting and Novotek AB go up and down completely randomly.
Pair Corralation between B3 Consulting and Novotek AB
Assuming the 90 days horizon B3 Consulting Group is expected to under-perform the Novotek AB. In addition to that, B3 Consulting is 1.11 times more volatile than Novotek AB. It trades about -0.06 of its total potential returns per unit of risk. Novotek AB is currently generating about 0.35 per unit of volatility. If you would invest 6,900 in Novotek AB on November 29, 2024 and sell it today you would earn a total of 1,200 from holding Novotek AB or generate 17.39% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
B3 Consulting Group vs. Novotek AB
Performance |
| Timeline |
| B3 Consulting Group |
| Novotek AB |
B3 Consulting and Novotek AB Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with B3 Consulting and Novotek AB
The main advantage of trading using opposite B3 Consulting and Novotek AB positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if B3 Consulting position performs unexpectedly, Novotek 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 Novotek AB will offset losses from the drop in Novotek AB's long position.| B3 Consulting vs. Dedicare AB | B3 Consulting vs. Prevas AB | B3 Consulting vs. BE Group AB | B3 Consulting vs. Hexatronic Group AB |
| Novotek AB vs. Softronic AB | Novotek AB vs. Prevas AB | Novotek AB vs. FormPipe Software AB | Novotek AB vs. Dedicare 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 Directory module to find actively traded commodities issued by global exchanges.
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