Correlation Between Essity AB and AAK AB
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By analyzing existing cross correlation between Essity AB and AAK AB, you can compare the effects of market volatilities on Essity AB and AAK 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 Essity AB with a short position of AAK AB. Check out your portfolio center. Please also check ongoing floating volatility patterns of Essity AB and AAK AB.
Diversification Opportunities for Essity AB and AAK AB
Very poor diversification
The 3 months correlation between Essity and AAK is 0.83. Overlapping area represents the amount of risk that can be diversified away by holding Essity AB and AAK AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AAK AB and Essity AB 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 Essity AB are associated (or correlated) with AAK AB. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AAK AB has no effect on the direction of Essity AB i.e., Essity AB and AAK AB go up and down completely randomly.
Pair Corralation between Essity AB and AAK AB
Assuming the 90 days trading horizon Essity AB is expected to generate 0.78 times more return on investment than AAK AB. However, Essity AB is 1.29 times less risky than AAK AB. It trades about 0.0 of its potential returns per unit of risk. AAK AB is currently generating about -0.11 per unit of risk. If you would invest 30,080 in Essity AB on September 1, 2024 and sell it today you would lose (60.00) from holding Essity AB or give up 0.2% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Essity AB vs. AAK AB
Performance |
| Timeline |
| Essity AB |
| AAK AB |
Essity AB and AAK AB Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Essity AB and AAK AB
The main advantage of trading using opposite Essity AB and AAK AB positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Essity AB position performs unexpectedly, AAK 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 AAK AB will offset losses from the drop in AAK AB's long position.| Essity AB vs. Svenska Cellulosa Aktiebolaget | Essity AB vs. ASSA ABLOY AB | Essity AB vs. AB Electrolux | Essity AB vs. AB SKF |
| AAK AB vs. Castellum AB | AAK AB vs. Tele2 AB | AAK AB vs. Investor AB ser | AAK AB vs. Kinnevik Investment 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 Center module to all portfolio management and optimization tools to improve performance of your portfolios.
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