Correlation Between Cloetta AB and Nolato AB
Can any of the company-specific risk be diversified away by investing in both Cloetta AB and Nolato 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 Cloetta AB and Nolato AB into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Cloetta AB and Nolato AB, you can compare the effects of market volatilities on Cloetta AB and Nolato 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 Cloetta AB with a short position of Nolato AB. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cloetta AB and Nolato AB.
Diversification Opportunities for Cloetta AB and Nolato AB
0.28 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Cloetta and Nolato is 0.28. Overlapping area represents the amount of risk that can be diversified away by holding Cloetta AB and Nolato AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nolato 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 Nolato AB. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nolato AB has no effect on the direction of Cloetta AB i.e., Cloetta AB and Nolato AB go up and down completely randomly.
Pair Corralation between Cloetta AB and Nolato AB
Assuming the 90 days trading horizon Cloetta AB is expected to generate 0.6 times more return on investment than Nolato AB. However, Cloetta AB is 1.65 times less risky than Nolato AB. It trades about -0.26 of its potential returns per unit of risk. Nolato AB is currently generating about -0.2 per unit of risk. If you would invest 2,732 in Cloetta AB on August 29, 2024 and sell it today you would lose (160.00) from holding Cloetta AB or give up 5.86% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Cloetta AB vs. Nolato AB
Performance |
| Timeline |
| Cloetta AB |
| Nolato AB |
Cloetta AB and Nolato AB Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cloetta AB and Nolato AB
The main advantage of trading using opposite Cloetta AB and Nolato AB positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cloetta AB position performs unexpectedly, Nolato 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 Nolato AB will offset losses from the drop in Nolato AB'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 |
| Nolato AB vs. HEXPOL AB | Nolato AB vs. Trelleborg AB | Nolato AB vs. Indutrade AB | Nolato AB vs. Vitrolife 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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.
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