Correlation Between Dedicare and Addnode Group
Can any of the company-specific risk be diversified away by investing in both Dedicare and Addnode 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 Dedicare and Addnode Group into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Dedicare AB and Addnode Group AB, you can compare the effects of market volatilities on Dedicare and Addnode 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 Dedicare with a short position of Addnode Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dedicare and Addnode Group.
Diversification Opportunities for Dedicare and Addnode Group
0.32 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Dedicare and Addnode is 0.32. Overlapping area represents the amount of risk that can be diversified away by holding Dedicare AB and Addnode Group AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Addnode Group AB and Dedicare 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 Dedicare AB are associated (or correlated) with Addnode Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Addnode Group AB has no effect on the direction of Dedicare i.e., Dedicare and Addnode Group go up and down completely randomly.
Pair Corralation between Dedicare and Addnode Group
Assuming the 90 days trading horizon Dedicare AB is expected to generate 0.94 times more return on investment than Addnode Group. However, Dedicare AB is 1.06 times less risky than Addnode Group. It trades about -0.01 of its potential returns per unit of risk. Addnode Group AB is currently generating about -0.05 per unit of risk. If you would invest 5,960 in Dedicare AB on September 1, 2024 and sell it today you would lose (350.00) from holding Dedicare AB or give up 5.87% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Dedicare AB vs. Addnode Group AB
Performance |
| Timeline |
| Dedicare AB |
| Addnode Group AB |
Dedicare and Addnode Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Dedicare and Addnode Group
The main advantage of trading using opposite Dedicare and Addnode Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dedicare position performs unexpectedly, Addnode 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 Addnode Group will offset losses from the drop in Addnode Group's long position.The idea behind Dedicare AB and Addnode Group AB pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| Addnode Group vs. Lagercrantz Group AB | Addnode Group vs. Addtech AB | Addnode Group vs. Vitec Software Group | Addnode Group vs. AddLife 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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.
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