Correlation Between Ellen AB and Clean Motion
Can any of the company-specific risk be diversified away by investing in both Ellen AB and Clean Motion 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 Ellen AB and Clean Motion into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ellen AB and Clean Motion AB, you can compare the effects of market volatilities on Ellen AB and Clean Motion 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 Ellen AB with a short position of Clean Motion. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ellen AB and Clean Motion.
Diversification Opportunities for Ellen AB and Clean Motion
-0.35 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Ellen and Clean is -0.35. Overlapping area represents the amount of risk that can be diversified away by holding Ellen AB and Clean Motion AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Clean Motion AB and Ellen 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 Ellen AB are associated (or correlated) with Clean Motion. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Clean Motion AB has no effect on the direction of Ellen AB i.e., Ellen AB and Clean Motion go up and down completely randomly.
Pair Corralation between Ellen AB and Clean Motion
Assuming the 90 days trading horizon Ellen AB is expected to generate 0.28 times more return on investment than Clean Motion. However, Ellen AB is 3.52 times less risky than Clean Motion. It trades about -0.03 of its potential returns per unit of risk. Clean Motion AB is currently generating about -0.32 per unit of risk. If you would invest 107.00 in Ellen AB on August 26, 2024 and sell it today you would lose (1.00) from holding Ellen AB or give up 0.93% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Ellen AB vs. Clean Motion AB
Performance |
| Timeline |
| Ellen AB |
| Clean Motion AB |
Ellen AB and Clean Motion Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ellen AB and Clean Motion
The main advantage of trading using opposite Ellen AB and Clean Motion positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ellen AB position performs unexpectedly, Clean Motion 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 Clean Motion will offset losses from the drop in Clean Motion's long position.The idea behind Ellen AB and Clean Motion 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.| Clean Motion vs. Doxa AB | Clean Motion vs. Cortus Energy AB | Clean Motion vs. Online Brands Nordic | Clean Motion vs. NetJobs Group 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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.
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