Correlation Between Eolus Vind and AAC Clyde
Can any of the company-specific risk be diversified away by investing in both Eolus Vind and AAC Clyde 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 Eolus Vind and AAC Clyde into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Eolus Vind AB and AAC Clyde Space, you can compare the effects of market volatilities on Eolus Vind and AAC Clyde 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 Eolus Vind with a short position of AAC Clyde. Check out your portfolio center. Please also check ongoing floating volatility patterns of Eolus Vind and AAC Clyde.
Diversification Opportunities for Eolus Vind and AAC Clyde
-0.29 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Eolus and AAC is -0.29. Overlapping area represents the amount of risk that can be diversified away by holding Eolus Vind AB and AAC Clyde Space in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AAC Clyde Space and Eolus Vind 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 Eolus Vind AB are associated (or correlated) with AAC Clyde. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AAC Clyde Space has no effect on the direction of Eolus Vind i.e., Eolus Vind and AAC Clyde go up and down completely randomly.
Pair Corralation between Eolus Vind and AAC Clyde
Assuming the 90 days trading horizon Eolus Vind AB is expected to under-perform the AAC Clyde. But the stock apears to be less risky and, when comparing its historical volatility, Eolus Vind AB is 1.39 times less risky than AAC Clyde. The stock trades about -0.15 of its potential returns per unit of risk. The AAC Clyde Space is currently generating about 0.12 of returns per unit of risk over similar time horizon. If you would invest 3,475 in AAC Clyde Space on August 28, 2024 and sell it today you would earn a total of 1,020 from holding AAC Clyde Space or generate 29.35% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Eolus Vind AB vs. AAC Clyde Space
Performance |
| Timeline |
| Eolus Vind AB |
| AAC Clyde Space |
Eolus Vind and AAC Clyde Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Eolus Vind and AAC Clyde
The main advantage of trading using opposite Eolus Vind and AAC Clyde positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Eolus Vind position performs unexpectedly, AAC Clyde 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 AAC Clyde will offset losses from the drop in AAC Clyde's long position.| Eolus Vind vs. NOTE AB | Eolus Vind vs. Zaptec AS | Eolus Vind vs. SolTech Energy Sweden | Eolus Vind vs. Scatec Solar OL |
| AAC Clyde vs. aXichem AB | AAC Clyde vs. Gaming Corps AB | AAC Clyde vs. Cantargia AB | AAC Clyde vs. KABE 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 Portfolio Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
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