Correlation Between AB Electrolux and AB Electrolux
Can any of the company-specific risk be diversified away by investing in both AB Electrolux and AB Electrolux 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 AB Electrolux and AB Electrolux into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between AB Electrolux and AB Electrolux, you can compare the effects of market volatilities on AB Electrolux and AB Electrolux 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 AB Electrolux with a short position of AB Electrolux. Check out your portfolio center. Please also check ongoing floating volatility patterns of AB Electrolux and AB Electrolux.
Diversification Opportunities for AB Electrolux and AB Electrolux
0.92 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between ELUX-B and ELUX-A is 0.92. Overlapping area represents the amount of risk that can be diversified away by holding AB Electrolux and AB Electrolux in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AB Electrolux and AB Electrolux 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 AB Electrolux are associated (or correlated) with AB Electrolux. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AB Electrolux has no effect on the direction of AB Electrolux i.e., AB Electrolux and AB Electrolux go up and down completely randomly.
Pair Corralation between AB Electrolux and AB Electrolux
Assuming the 90 days trading horizon AB Electrolux is expected to under-perform the AB Electrolux. But the stock apears to be less risky and, when comparing its historical volatility, AB Electrolux is 1.16 times less risky than AB Electrolux. The stock trades about -0.02 of its potential returns per unit of risk. The AB Electrolux is currently generating about -0.01 of returns per unit of risk over similar time horizon. If you would invest 16,680 in AB Electrolux on September 14, 2024 and sell it today you would lose (5,580) from holding AB Electrolux or give up 33.45% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
AB Electrolux vs. AB Electrolux
Performance |
| Timeline |
| AB Electrolux |
| AB Electrolux |
AB Electrolux and AB Electrolux Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with AB Electrolux and AB Electrolux
The main advantage of trading using opposite AB Electrolux and AB Electrolux positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AB Electrolux position performs unexpectedly, AB Electrolux 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 Electrolux will offset losses from the drop in AB Electrolux's long position.| AB Electrolux vs. AB SKF | AB Electrolux vs. Tele2 AB | AB Electrolux vs. Sandvik AB | AB Electrolux vs. Skanska AB |
| AB Electrolux vs. AB SKF | AB Electrolux vs. Tele2 AB | AB Electrolux vs. Sandvik AB | AB Electrolux vs. Skanska 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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..
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