Correlation Between Telefonaktiebolaget and Camurus AB
Can any of the company-specific risk be diversified away by investing in both Telefonaktiebolaget and Camurus AB 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 Telefonaktiebolaget and Camurus AB into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Telefonaktiebolaget LM Ericsson and Camurus AB, you can compare the effects of market volatilities on Telefonaktiebolaget and Camurus AB 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 Telefonaktiebolaget with a short position of Camurus AB. Check out your portfolio center. Please also check ongoing floating volatility patterns of Telefonaktiebolaget and Camurus AB.
Diversification Opportunities for Telefonaktiebolaget and Camurus AB
-0.77 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Telefonaktiebolaget and Camurus is -0.77. Overlapping area represents the amount of risk that can be diversified away by holding Telefonaktiebolaget LM Ericsso and Camurus AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Camurus AB and Telefonaktiebolaget 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 Telefonaktiebolaget LM Ericsson are associated (or correlated) with Camurus AB. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Camurus AB has no effect on the direction of Telefonaktiebolaget i.e., Telefonaktiebolaget and Camurus AB go up and down completely randomly.
Pair Corralation between Telefonaktiebolaget and Camurus AB
Assuming the 90 days trading horizon Telefonaktiebolaget LM Ericsson is expected to generate 0.33 times more return on investment than Camurus AB. However, Telefonaktiebolaget LM Ericsson is 3.04 times less risky than Camurus AB. It trades about -0.07 of its potential returns per unit of risk. Camurus AB is currently generating about -0.15 per unit of risk. If you would invest 9,100 in Telefonaktiebolaget LM Ericsson on August 29, 2024 and sell it today you would lose (110.00) from holding Telefonaktiebolaget LM Ericsson or give up 1.21% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Telefonaktiebolaget LM Ericsso vs. Camurus AB
Performance |
| Timeline |
| Telefonaktiebolaget |
| Camurus AB |
Telefonaktiebolaget and Camurus AB Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Telefonaktiebolaget and Camurus AB
The main advantage of trading using opposite Telefonaktiebolaget and Camurus AB positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Telefonaktiebolaget position performs unexpectedly, Camurus AB 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 Camurus AB will offset losses from the drop in Camurus AB's long position.| Telefonaktiebolaget vs. Telefonaktiebolaget LM Ericsson | Telefonaktiebolaget vs. AB Volvo | Telefonaktiebolaget vs. Investor AB ser | Telefonaktiebolaget vs. Industrivarden AB ser |
| Camurus AB vs. BioArctic AB | Camurus AB vs. Oncopeptides AB | Camurus AB vs. Hansa Biopharma AB | Camurus AB vs. Swedish Orphan Biovitrum |
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 Search module to search for actively traded equities including funds and ETFs from over 30 global markets.
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