Correlation Between Diadrom Holding and FlexQube
Can any of the company-specific risk be diversified away by investing in both Diadrom Holding and FlexQube 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 Diadrom Holding and FlexQube into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Diadrom Holding AB and FlexQube AB, you can compare the effects of market volatilities on Diadrom Holding and FlexQube 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 Diadrom Holding with a short position of FlexQube. Check out your portfolio center. Please also check ongoing floating volatility patterns of Diadrom Holding and FlexQube.
Diversification Opportunities for Diadrom Holding and FlexQube
0.51 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Diadrom and FlexQube is 0.51. Overlapping area represents the amount of risk that can be diversified away by holding Diadrom Holding AB and FlexQube AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on FlexQube AB and Diadrom Holding 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 Diadrom Holding AB are associated (or correlated) with FlexQube. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of FlexQube AB has no effect on the direction of Diadrom Holding i.e., Diadrom Holding and FlexQube go up and down completely randomly.
Pair Corralation between Diadrom Holding and FlexQube
Assuming the 90 days trading horizon Diadrom Holding AB is expected to generate 0.68 times more return on investment than FlexQube. However, Diadrom Holding AB is 1.48 times less risky than FlexQube. It trades about -0.03 of its potential returns per unit of risk. FlexQube AB is currently generating about -0.08 per unit of risk. If you would invest 1,286 in Diadrom Holding AB on September 3, 2024 and sell it today you would lose (570.00) from holding Diadrom Holding AB or give up 44.32% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Diadrom Holding AB vs. FlexQube AB
Performance |
| Timeline |
| Diadrom Holding AB |
| FlexQube AB |
Diadrom Holding and FlexQube Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Diadrom Holding and FlexQube
The main advantage of trading using opposite Diadrom Holding and FlexQube positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Diadrom Holding position performs unexpectedly, FlexQube 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 FlexQube will offset losses from the drop in FlexQube's long position.| Diadrom Holding vs. Enea AB | Diadrom Holding vs. Novotek AB | Diadrom Holding vs. Addnode Group AB | Diadrom Holding vs. Softronic AB |
| FlexQube vs. Generic Sweden publ | FlexQube vs. Firefly AB | FlexQube vs. Awardit AB | FlexQube vs. BIMobject 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 Portfolio Center module to all portfolio management and optimization tools to improve performance of your portfolios.
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