Correlation Between DistIT AB and IAR Systems
Can any of the company-specific risk be diversified away by investing in both DistIT AB and IAR Systems 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 DistIT AB and IAR Systems into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between DistIT AB and IAR Systems Group, you can compare the effects of market volatilities on DistIT AB and IAR Systems 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 DistIT AB with a short position of IAR Systems. Check out your portfolio center. Please also check ongoing floating volatility patterns of DistIT AB and IAR Systems.
Diversification Opportunities for DistIT AB and IAR Systems
0.6 | Correlation Coefficient |
Poor diversification
The 3 months correlation between DistIT and IAR is 0.6. Overlapping area represents the amount of risk that can be diversified away by holding DistIT AB and IAR Systems Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on IAR Systems Group and DistIT AB 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 DistIT AB are associated (or correlated) with IAR Systems. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of IAR Systems Group has no effect on the direction of DistIT AB i.e., DistIT AB and IAR Systems go up and down completely randomly.
Pair Corralation between DistIT AB and IAR Systems
Assuming the 90 days trading horizon DistIT AB is expected to under-perform the IAR Systems. In addition to that, DistIT AB is 1.86 times more volatile than IAR Systems Group. It trades about -0.09 of its total potential returns per unit of risk. IAR Systems Group is currently generating about 0.01 per unit of volatility. If you would invest 14,811 in IAR Systems Group on September 3, 2024 and sell it today you would lose (311.00) from holding IAR Systems Group or give up 2.1% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
DistIT AB vs. IAR Systems Group
Performance |
| Timeline |
| DistIT AB |
| IAR Systems Group |
DistIT AB and IAR Systems Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with DistIT AB and IAR Systems
The main advantage of trading using opposite DistIT AB and IAR Systems positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if DistIT AB position performs unexpectedly, IAR Systems 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 IAR Systems will offset losses from the drop in IAR Systems' long position.| DistIT AB vs. Alcadon Group AB | DistIT AB vs. IAR Systems Group | DistIT AB vs. Bulten AB | DistIT AB vs. Dustin Group AB |
| IAR Systems vs. CellaVision AB | IAR Systems vs. HMS Networks AB | IAR Systems vs. Enea AB | IAR Systems vs. Know IT 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 Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
Other Complementary Tools
| Portfolio Center All portfolio management and optimization tools to improve performance of your portfolios | |
| Technical Analysis Check basic technical indicators and analysis based on most latest market data | |
| Global Markets Map Get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes | |
| Money Managers Screen money managers from public funds and ETFs managed around the world | |
| Commodity Directory Find actively traded commodities issued by global exchanges |