Correlation Between COOR Service and Inwido AB
Can any of the company-specific risk be diversified away by investing in both COOR Service and Inwido 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 COOR Service and Inwido AB 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 Inwido AB, you can compare the effects of market volatilities on COOR Service and Inwido 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 COOR Service with a short position of Inwido AB. Check out your portfolio center. Please also check ongoing floating volatility patterns of COOR Service and Inwido AB.
Diversification Opportunities for COOR Service and Inwido AB
-0.45 | Correlation Coefficient |
Very good diversification
The 3 months correlation between COOR and Inwido is -0.45. Overlapping area represents the amount of risk that can be diversified away by holding COOR Service Management and Inwido AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Inwido AB 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 Inwido AB. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Inwido AB has no effect on the direction of COOR Service i.e., COOR Service and Inwido AB go up and down completely randomly.
Pair Corralation between COOR Service and Inwido AB
Assuming the 90 days trading horizon COOR Service Management is expected to under-perform the Inwido AB. In addition to that, COOR Service is 1.31 times more volatile than Inwido AB. It trades about -0.31 of its total potential returns per unit of risk. Inwido AB is currently generating about -0.1 per unit of volatility. If you would invest 19,140 in Inwido AB on August 25, 2024 and sell it today you would lose (580.00) from holding Inwido AB or give up 3.03% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
COOR Service Management vs. Inwido AB
Performance |
| Timeline |
| COOR Service Management |
| Inwido AB |
COOR Service and Inwido AB Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with COOR Service and Inwido AB
The main advantage of trading using opposite COOR Service and Inwido AB positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if COOR Service position performs unexpectedly, Inwido 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 Inwido AB will offset losses from the drop in Inwido AB'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 |
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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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.
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