Correlation Between CellaVision and AddLife AB
Can any of the company-specific risk be diversified away by investing in both CellaVision and AddLife 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 CellaVision and AddLife AB into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between CellaVision AB and AddLife AB, you can compare the effects of market volatilities on CellaVision and AddLife 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 CellaVision with a short position of AddLife AB. Check out your portfolio center. Please also check ongoing floating volatility patterns of CellaVision and AddLife AB.
Diversification Opportunities for CellaVision and AddLife AB
0.05 | Correlation Coefficient |
Significant diversification
The 3 months correlation between CellaVision and AddLife is 0.05. Overlapping area represents the amount of risk that can be diversified away by holding CellaVision AB and AddLife AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AddLife AB and CellaVision 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 CellaVision AB are associated (or correlated) with AddLife AB. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AddLife AB has no effect on the direction of CellaVision i.e., CellaVision and AddLife AB go up and down completely randomly.
Pair Corralation between CellaVision and AddLife AB
Assuming the 90 days trading horizon CellaVision AB is expected to generate 1.41 times more return on investment than AddLife AB. However, CellaVision is 1.41 times more volatile than AddLife AB. It trades about 0.11 of its potential returns per unit of risk. AddLife AB is currently generating about 0.15 per unit of risk. If you would invest 21,150 in CellaVision AB on November 3, 2024 and sell it today you would earn a total of 1,500 from holding CellaVision AB or generate 7.09% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
CellaVision AB vs. AddLife AB
Performance |
| Timeline |
| CellaVision AB |
| AddLife AB |
CellaVision and AddLife AB Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CellaVision and AddLife AB
The main advantage of trading using opposite CellaVision and AddLife AB positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CellaVision position performs unexpectedly, AddLife 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 AddLife AB will offset losses from the drop in AddLife AB's long position.| CellaVision vs. Vitrolife AB | CellaVision vs. Biotage AB | CellaVision vs. Sectra AB | CellaVision vs. BioGaia AB |
| AddLife AB vs. Addtech AB | AddLife AB vs. Lifco AB | AddLife AB vs. Indutrade AB | AddLife AB vs. Lagercrantz Group 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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.
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