Correlation Between Scandinavian ChemoTech and ALM Equity
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By analyzing existing cross correlation between Scandinavian ChemoTech AB and ALM Equity AB, you can compare the effects of market volatilities on Scandinavian ChemoTech and ALM Equity 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 Scandinavian ChemoTech with a short position of ALM Equity. Check out your portfolio center. Please also check ongoing floating volatility patterns of Scandinavian ChemoTech and ALM Equity.
Diversification Opportunities for Scandinavian ChemoTech and ALM Equity
0.74 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Scandinavian and ALM is 0.74. Overlapping area represents the amount of risk that can be diversified away by holding Scandinavian ChemoTech AB and ALM Equity AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ALM Equity AB and Scandinavian ChemoTech 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 Scandinavian ChemoTech AB are associated (or correlated) with ALM Equity. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ALM Equity AB has no effect on the direction of Scandinavian ChemoTech i.e., Scandinavian ChemoTech and ALM Equity go up and down completely randomly.
Pair Corralation between Scandinavian ChemoTech and ALM Equity
Assuming the 90 days trading horizon Scandinavian ChemoTech AB is expected to under-perform the ALM Equity. In addition to that, Scandinavian ChemoTech is 5.92 times more volatile than ALM Equity AB. It trades about -0.01 of its total potential returns per unit of risk. ALM Equity AB is currently generating about 0.05 per unit of volatility. If you would invest 7,158 in ALM Equity AB on September 12, 2024 and sell it today you would earn a total of 1,372 from holding ALM Equity AB or generate 19.17% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Scandinavian ChemoTech AB vs. ALM Equity AB
Performance |
| Timeline |
| Scandinavian ChemoTech |
| ALM Equity AB |
Scandinavian ChemoTech and ALM Equity Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Scandinavian ChemoTech and ALM Equity
The main advantage of trading using opposite Scandinavian ChemoTech and ALM Equity positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Scandinavian ChemoTech position performs unexpectedly, ALM Equity 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 ALM Equity will offset losses from the drop in ALM Equity's long position.| Scandinavian ChemoTech vs. Vicore Pharma Holding | Scandinavian ChemoTech vs. Enorama Pharma AB | Scandinavian ChemoTech vs. Xintela AB | Scandinavian ChemoTech vs. Alzinova AB |
| ALM Equity vs. Upsales Technology AB | ALM Equity vs. Catena Media plc | ALM Equity vs. Systemair AB | ALM Equity vs. Scandinavian ChemoTech 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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.
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