Correlation Between Diadrom Holding and Greater Than
Can any of the company-specific risk be diversified away by investing in both Diadrom Holding and Greater Than 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 Greater Than 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 Greater Than AB, you can compare the effects of market volatilities on Diadrom Holding and Greater Than 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 Greater Than. Check out your portfolio center. Please also check ongoing floating volatility patterns of Diadrom Holding and Greater Than.
Diversification Opportunities for Diadrom Holding and Greater Than
0.74 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Diadrom and Greater is 0.74. Overlapping area represents the amount of risk that can be diversified away by holding Diadrom Holding AB and Greater Than AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Greater Than 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 Greater Than. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Greater Than AB has no effect on the direction of Diadrom Holding i.e., Diadrom Holding and Greater Than go up and down completely randomly.
Pair Corralation between Diadrom Holding and Greater Than
Assuming the 90 days trading horizon Diadrom Holding is expected to generate 1.53 times less return on investment than Greater Than. But when comparing it to its historical volatility, Diadrom Holding AB is 1.73 times less risky than Greater Than. It trades about 0.2 of its potential returns per unit of risk. Greater Than AB is currently generating about 0.18 of returns per unit of risk over similar time horizon. If you would invest 2,850 in Greater Than AB on November 8, 2024 and sell it today you would earn a total of 550.00 from holding Greater Than AB or generate 19.3% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Diadrom Holding AB vs. Greater Than AB
Performance |
| Timeline |
| Diadrom Holding AB |
| Greater Than AB |
Diadrom Holding and Greater Than Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Diadrom Holding and Greater Than
The main advantage of trading using opposite Diadrom Holding and Greater Than positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Diadrom Holding position performs unexpectedly, Greater Than 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 Greater Than will offset losses from the drop in Greater Than's long position.| Diadrom Holding vs. Generic Sweden publ | Diadrom Holding vs. Avensia publ AB | Diadrom Holding vs. Softronic AB | Diadrom Holding vs. Drillcon AB |
| Greater Than vs. Kancera AB | Greater Than vs. Terranet AB | Greater Than vs. Divio Technologies AB | Greater Than vs. Cantargia 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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.
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