Correlation Between AB Electrolux and Niloerngruppen
Can any of the company-specific risk be diversified away by investing in both AB Electrolux and Niloerngruppen 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 Niloerngruppen into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between AB Electrolux and Niloerngruppen AB Series, you can compare the effects of market volatilities on AB Electrolux and Niloerngruppen 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 Niloerngruppen. Check out your portfolio center. Please also check ongoing floating volatility patterns of AB Electrolux and Niloerngruppen.
Diversification Opportunities for AB Electrolux and Niloerngruppen
-0.58 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between ELUX-B and Niloerngruppen is -0.58. Overlapping area represents the amount of risk that can be diversified away by holding AB Electrolux and Niloerngruppen AB Series in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Niloerngruppen AB Series 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 Niloerngruppen. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Niloerngruppen AB Series has no effect on the direction of AB Electrolux i.e., AB Electrolux and Niloerngruppen go up and down completely randomly.
Pair Corralation between AB Electrolux and Niloerngruppen
Assuming the 90 days trading horizon AB Electrolux is expected to under-perform the Niloerngruppen. In addition to that, AB Electrolux is 1.72 times more volatile than Niloerngruppen AB Series. It trades about -0.19 of its total potential returns per unit of risk. Niloerngruppen AB Series is currently generating about -0.08 per unit of volatility. If you would invest 6,940 in Niloerngruppen AB Series on September 1, 2024 and sell it today you would lose (160.00) from holding Niloerngruppen AB Series or give up 2.31% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 95.65% |
| Values | Daily Returns |
AB Electrolux vs. Niloerngruppen AB Series
Performance |
| Timeline |
| AB Electrolux |
| Niloerngruppen AB Series |
AB Electrolux and Niloerngruppen Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with AB Electrolux and Niloerngruppen
The main advantage of trading using opposite AB Electrolux and Niloerngruppen positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AB Electrolux position performs unexpectedly, Niloerngruppen 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 Niloerngruppen will offset losses from the drop in Niloerngruppen's long position.| AB Electrolux vs. AB SKF | AB Electrolux vs. Tele2 AB | AB Electrolux vs. Sandvik AB | AB Electrolux vs. Skanska AB |
| Niloerngruppen vs. eWork Group AB | Niloerngruppen vs. Softronic AB | Niloerngruppen vs. Bjorn Borg AB | Niloerngruppen vs. Novotek 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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.
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