Correlation Between Clean Motion and Nobia AB
Can any of the company-specific risk be diversified away by investing in both Clean Motion and Nobia 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 Clean Motion and Nobia AB into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Clean Motion AB and Nobia AB, you can compare the effects of market volatilities on Clean Motion and Nobia 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 Clean Motion with a short position of Nobia AB. Check out your portfolio center. Please also check ongoing floating volatility patterns of Clean Motion and Nobia AB.
Diversification Opportunities for Clean Motion and Nobia AB
0.88 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Clean and Nobia is 0.88. Overlapping area represents the amount of risk that can be diversified away by holding Clean Motion AB and Nobia AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nobia AB and Clean Motion 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 Clean Motion AB are associated (or correlated) with Nobia AB. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nobia AB has no effect on the direction of Clean Motion i.e., Clean Motion and Nobia AB go up and down completely randomly.
Pair Corralation between Clean Motion and Nobia AB
Assuming the 90 days trading horizon Clean Motion AB is expected to under-perform the Nobia AB. In addition to that, Clean Motion is 1.1 times more volatile than Nobia AB. It trades about -0.36 of its total potential returns per unit of risk. Nobia AB is currently generating about -0.29 per unit of volatility. If you would invest 501.00 in Nobia AB on September 1, 2024 and sell it today you would lose (128.00) from holding Nobia AB or give up 25.55% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 95.65% |
| Values | Daily Returns |
Clean Motion AB vs. Nobia AB
Performance |
| Timeline |
| Clean Motion AB |
| Nobia AB |
Clean Motion and Nobia AB Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Clean Motion and Nobia AB
The main advantage of trading using opposite Clean Motion and Nobia AB positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Clean Motion position performs unexpectedly, Nobia 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 Nobia AB will offset losses from the drop in Nobia AB's long position.| Clean Motion vs. Doxa AB | Clean Motion vs. Cortus Energy AB | Clean Motion vs. Online Brands Nordic | Clean Motion vs. NetJobs 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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.
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