Correlation Between Cloetta AB and Clas Ohlson
Can any of the company-specific risk be diversified away by investing in both Cloetta AB and Clas Ohlson 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 Cloetta AB and Clas Ohlson into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Cloetta AB and Clas Ohlson AB, you can compare the effects of market volatilities on Cloetta AB and Clas Ohlson 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 Cloetta AB with a short position of Clas Ohlson. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cloetta AB and Clas Ohlson.
Diversification Opportunities for Cloetta AB and Clas Ohlson
-0.29 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Cloetta and Clas is -0.29. Overlapping area represents the amount of risk that can be diversified away by holding Cloetta AB and Clas Ohlson AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Clas Ohlson AB and Cloetta 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 Cloetta AB are associated (or correlated) with Clas Ohlson. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Clas Ohlson AB has no effect on the direction of Cloetta AB i.e., Cloetta AB and Clas Ohlson go up and down completely randomly.
Pair Corralation between Cloetta AB and Clas Ohlson
Assuming the 90 days trading horizon Cloetta AB is expected to generate 1.19 times less return on investment than Clas Ohlson. In addition to that, Cloetta AB is 1.49 times more volatile than Clas Ohlson AB. It trades about 0.19 of its total potential returns per unit of risk. Clas Ohlson AB is currently generating about 0.34 per unit of volatility. If you would invest 20,670 in Clas Ohlson AB on November 3, 2024 and sell it today you would earn a total of 2,930 from holding Clas Ohlson AB or generate 14.18% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Cloetta AB vs. Clas Ohlson AB
Performance |
| Timeline |
| Cloetta AB |
| Clas Ohlson AB |
Cloetta AB and Clas Ohlson Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cloetta AB and Clas Ohlson
The main advantage of trading using opposite Cloetta AB and Clas Ohlson positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cloetta AB position performs unexpectedly, Clas Ohlson 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 Clas Ohlson will offset losses from the drop in Clas Ohlson's long position.| Cloetta AB vs. Securitas AB | Cloetta AB vs. Clas Ohlson AB | Cloetta AB vs. Axfood AB | Cloetta AB vs. Byggmax Group AB |
| Clas Ohlson vs. Tele2 AB | Clas Ohlson vs. Axfood AB | Clas Ohlson vs. Telia Company AB | Clas Ohlson vs. Byggmax 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 Global Correlations module to find global opportunities by holding instruments from different markets.
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