Correlation Between Telefonaktiebolaget and Xbrane Biopharma
Can any of the company-specific risk be diversified away by investing in both Telefonaktiebolaget and Xbrane Biopharma 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 Xbrane Biopharma 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 Xbrane Biopharma AB, you can compare the effects of market volatilities on Telefonaktiebolaget and Xbrane Biopharma 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 Xbrane Biopharma. Check out your portfolio center. Please also check ongoing floating volatility patterns of Telefonaktiebolaget and Xbrane Biopharma.
Diversification Opportunities for Telefonaktiebolaget and Xbrane Biopharma
-0.18 | Correlation Coefficient |
Good diversification
The 3 months correlation between Telefonaktiebolaget and Xbrane is -0.18. Overlapping area represents the amount of risk that can be diversified away by holding Telefonaktiebolaget LM Ericsso and Xbrane Biopharma AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Xbrane Biopharma 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 Xbrane Biopharma. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Xbrane Biopharma has no effect on the direction of Telefonaktiebolaget i.e., Telefonaktiebolaget and Xbrane Biopharma go up and down completely randomly.
Pair Corralation between Telefonaktiebolaget and Xbrane Biopharma
Assuming the 90 days trading horizon Telefonaktiebolaget LM Ericsson is expected to generate 0.14 times more return on investment than Xbrane Biopharma. However, Telefonaktiebolaget LM Ericsson is 7.38 times less risky than Xbrane Biopharma. It trades about 0.04 of its potential returns per unit of risk. Xbrane Biopharma AB is currently generating about -0.03 per unit of risk. If you would invest 6,404 in Telefonaktiebolaget LM Ericsson on November 27, 2024 and sell it today you would earn a total of 2,096 from holding Telefonaktiebolaget LM Ericsson or generate 32.73% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Telefonaktiebolaget LM Ericsso vs. Xbrane Biopharma AB
Performance |
| Timeline |
| Telefonaktiebolaget |
| Xbrane Biopharma |
Telefonaktiebolaget and Xbrane Biopharma Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Telefonaktiebolaget and Xbrane Biopharma
The main advantage of trading using opposite Telefonaktiebolaget and Xbrane Biopharma positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Telefonaktiebolaget position performs unexpectedly, Xbrane Biopharma 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 Xbrane Biopharma will offset losses from the drop in Xbrane Biopharma's long position.| Telefonaktiebolaget vs. Telefonaktiebolaget LM Ericsson | Telefonaktiebolaget vs. AB Volvo | Telefonaktiebolaget vs. Investor AB ser | Telefonaktiebolaget vs. Industrivarden AB ser |
| Xbrane Biopharma vs. Hansa Biopharma AB | Xbrane Biopharma vs. Vicore Pharma Holding | Xbrane Biopharma vs. XSpray Pharma AB | Xbrane Biopharma vs. Saniona 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 Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.
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