Correlation Between Clas Ohlson and Footway Group
Can any of the company-specific risk be diversified away by investing in both Clas Ohlson and Footway Group 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 Clas Ohlson and Footway Group into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Clas Ohlson AB and Footway Group AB, you can compare the effects of market volatilities on Clas Ohlson and Footway Group 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 Clas Ohlson with a short position of Footway Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of Clas Ohlson and Footway Group.
Diversification Opportunities for Clas Ohlson and Footway Group
-0.21 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Clas and Footway is -0.21. Overlapping area represents the amount of risk that can be diversified away by holding Clas Ohlson AB and Footway Group AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Footway Group AB and Clas Ohlson 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 Clas Ohlson AB are associated (or correlated) with Footway Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Footway Group AB has no effect on the direction of Clas Ohlson i.e., Clas Ohlson and Footway Group go up and down completely randomly.
Pair Corralation between Clas Ohlson and Footway Group
Assuming the 90 days trading horizon Clas Ohlson AB is expected to generate 0.32 times more return on investment than Footway Group. However, Clas Ohlson AB is 3.16 times less risky than Footway Group. It trades about 0.08 of its potential returns per unit of risk. Footway Group AB is currently generating about 0.0 per unit of risk. If you would invest 12,755 in Clas Ohlson AB on August 25, 2024 and sell it today you would earn a total of 6,405 from holding Clas Ohlson AB or generate 50.22% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 99.6% |
| Values | Daily Returns |
Clas Ohlson AB vs. Footway Group AB
Performance |
| Timeline |
| Clas Ohlson AB |
| Footway Group AB |
Clas Ohlson and Footway Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Clas Ohlson and Footway Group
The main advantage of trading using opposite Clas Ohlson and Footway Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Clas Ohlson position performs unexpectedly, Footway Group 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 Footway Group will offset losses from the drop in Footway Group's long position.| Clas Ohlson vs. Tele2 AB | Clas Ohlson vs. Axfood AB | Clas Ohlson vs. Telia Company AB | Clas Ohlson vs. Byggmax Group AB |
| Footway Group vs. Footway Group AB | Footway Group vs. Boozt AB | Footway Group vs. Clas Ohlson AB | Footway Group vs. KABE 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 Portfolio Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.
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