Correlation Between COOR Service and Avanza Bank
Can any of the company-specific risk be diversified away by investing in both COOR Service and Avanza Bank 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 COOR Service and Avanza Bank into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between COOR Service Management and Avanza Bank Holding, you can compare the effects of market volatilities on COOR Service and Avanza Bank 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 COOR Service with a short position of Avanza Bank. Check out your portfolio center. Please also check ongoing floating volatility patterns of COOR Service and Avanza Bank.
Diversification Opportunities for COOR Service and Avanza Bank
-0.54 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between COOR and Avanza is -0.54. Overlapping area represents the amount of risk that can be diversified away by holding COOR Service Management and Avanza Bank Holding in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Avanza Bank Holding and COOR Service 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 COOR Service Management are associated (or correlated) with Avanza Bank. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Avanza Bank Holding has no effect on the direction of COOR Service i.e., COOR Service and Avanza Bank go up and down completely randomly.
Pair Corralation between COOR Service and Avanza Bank
Assuming the 90 days trading horizon COOR Service Management is expected to under-perform the Avanza Bank. In addition to that, COOR Service is 1.12 times more volatile than Avanza Bank Holding. It trades about -0.05 of its total potential returns per unit of risk. Avanza Bank Holding is currently generating about 0.36 per unit of volatility. If you would invest 24,210 in Avanza Bank Holding on November 3, 2024 and sell it today you would earn a total of 9,210 from holding Avanza Bank Holding or generate 38.04% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
COOR Service Management vs. Avanza Bank Holding
Performance |
| Timeline |
| COOR Service Management |
| Avanza Bank Holding |
COOR Service and Avanza Bank Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with COOR Service and Avanza Bank
The main advantage of trading using opposite COOR Service and Avanza Bank positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if COOR Service position performs unexpectedly, Avanza Bank 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 Avanza Bank will offset losses from the drop in Avanza Bank's long position.| COOR Service vs. Inwido AB | COOR Service vs. Cloetta AB | COOR Service vs. Clas Ohlson AB | COOR Service vs. Bufab Holding AB |
| Avanza Bank vs. Axfood AB | Avanza Bank vs. Samhllsbyggnadsbolaget i Norden | Avanza Bank vs. Castellum AB | Avanza Bank vs. Investor AB ser |
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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.
Other Complementary Tools
| Pattern Recognition Use different Pattern Recognition models to time the market across multiple global exchanges | |
| Competition Analyzer Analyze and compare many basic indicators for a group of related or unrelated entities | |
| Portfolio Backtesting Avoid under-diversification and over-optimization by backtesting your portfolios | |
| Options Analysis Analyze and evaluate options and option chains as a potential hedge for your portfolios | |
| Correlation Analysis Reduce portfolio risk simply by holding instruments which are not perfectly correlated |