Correlation Between Ekobot AB and AB Volvo
Can any of the company-specific risk be diversified away by investing in both Ekobot AB and AB Volvo 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 Ekobot AB and AB Volvo into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ekobot AB and AB Volvo, you can compare the effects of market volatilities on Ekobot AB and AB Volvo 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 Ekobot AB with a short position of AB Volvo. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ekobot AB and AB Volvo.
Diversification Opportunities for Ekobot AB and AB Volvo
Very good diversification
The 3 months correlation between Ekobot and VOLV-A is -0.46. Overlapping area represents the amount of risk that can be diversified away by holding Ekobot AB and AB Volvo in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AB Volvo and Ekobot 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 Ekobot AB are associated (or correlated) with AB Volvo. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AB Volvo has no effect on the direction of Ekobot AB i.e., Ekobot AB and AB Volvo go up and down completely randomly.
Pair Corralation between Ekobot AB and AB Volvo
Assuming the 90 days trading horizon Ekobot AB is expected to under-perform the AB Volvo. In addition to that, Ekobot AB is 3.7 times more volatile than AB Volvo. It trades about -0.18 of its total potential returns per unit of risk. AB Volvo is currently generating about 0.01 per unit of volatility. If you would invest 27,280 in AB Volvo on August 31, 2024 and sell it today you would earn a total of 40.00 from holding AB Volvo or generate 0.15% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Ekobot AB vs. AB Volvo
Performance |
| Timeline |
| Ekobot AB |
| AB Volvo |
Ekobot AB and AB Volvo Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ekobot AB and AB Volvo
The main advantage of trading using opposite Ekobot AB and AB Volvo positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ekobot AB position performs unexpectedly, AB Volvo 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 AB Volvo will offset losses from the drop in AB Volvo's long position.| Ekobot AB vs. Cint Group AB | Ekobot AB vs. iZafe Group AB | Ekobot AB vs. Veg of Lund | Ekobot AB vs. Garo AB |
| AB Volvo vs. Investor AB ser | AB Volvo vs. Sandvik AB | AB Volvo vs. Svenska Handelsbanken AB | AB Volvo vs. Atlas Copco 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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.
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