Correlation Between Fluoguide and AddLife AB
Can any of the company-specific risk be diversified away by investing in both Fluoguide and AddLife 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 Fluoguide and AddLife AB into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Fluoguide AS and AddLife AB, you can compare the effects of market volatilities on Fluoguide and AddLife 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 Fluoguide with a short position of AddLife AB. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fluoguide and AddLife AB.
Diversification Opportunities for Fluoguide and AddLife AB
0.84 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Fluoguide and AddLife is 0.84. Overlapping area represents the amount of risk that can be diversified away by holding Fluoguide AS and AddLife AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AddLife AB and Fluoguide 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 Fluoguide AS are associated (or correlated) with AddLife AB. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AddLife AB has no effect on the direction of Fluoguide i.e., Fluoguide and AddLife AB go up and down completely randomly.
Pair Corralation between Fluoguide and AddLife AB
Assuming the 90 days trading horizon Fluoguide AS is expected to under-perform the AddLife AB. In addition to that, Fluoguide is 1.95 times more volatile than AddLife AB. It trades about -0.15 of its total potential returns per unit of risk. AddLife AB is currently generating about -0.06 per unit of volatility. If you would invest 13,510 in AddLife AB on August 26, 2024 and sell it today you would lose (310.00) from holding AddLife AB or give up 2.29% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Fluoguide AS vs. AddLife AB
Performance |
| Timeline |
| Fluoguide AS |
| AddLife AB |
Fluoguide and AddLife AB Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Fluoguide and AddLife AB
The main advantage of trading using opposite Fluoguide and AddLife AB positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fluoguide position performs unexpectedly, AddLife 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 AddLife AB will offset losses from the drop in AddLife AB's long position.| Fluoguide vs. Addtech AB | Fluoguide vs. Lifco AB | Fluoguide vs. Indutrade AB | Fluoguide vs. Lagercrantz Group AB |
| AddLife AB vs. Addtech AB | AddLife AB vs. Lifco AB | AddLife AB vs. Indutrade AB | AddLife AB vs. Lagercrantz 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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.
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