Correlation Between Fram Skandinavien and Wise Group
Can any of the company-specific risk be diversified away by investing in both Fram Skandinavien and Wise Group 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 Fram Skandinavien and Wise Group into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Fram Skandinavien AB and Wise Group AB, you can compare the effects of market volatilities on Fram Skandinavien and Wise Group 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 Fram Skandinavien with a short position of Wise Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fram Skandinavien and Wise Group.
Diversification Opportunities for Fram Skandinavien and Wise Group
0.9 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Fram and Wise is 0.9. Overlapping area represents the amount of risk that can be diversified away by holding Fram Skandinavien AB and Wise Group AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Wise Group AB and Fram Skandinavien 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 Fram Skandinavien AB are associated (or correlated) with Wise Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Wise Group AB has no effect on the direction of Fram Skandinavien i.e., Fram Skandinavien and Wise Group go up and down completely randomly.
Pair Corralation between Fram Skandinavien and Wise Group
Assuming the 90 days trading horizon Fram Skandinavien AB is expected to generate 1.16 times more return on investment than Wise Group. However, Fram Skandinavien is 1.16 times more volatile than Wise Group AB. It trades about -0.01 of its potential returns per unit of risk. Wise Group AB is currently generating about -0.13 per unit of risk. If you would invest 820.00 in Fram Skandinavien AB on September 1, 2024 and sell it today you would lose (20.00) from holding Fram Skandinavien AB or give up 2.44% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Fram Skandinavien AB vs. Wise Group AB
Performance |
| Timeline |
| Fram Skandinavien |
| Wise Group AB |
Fram Skandinavien and Wise Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Fram Skandinavien and Wise Group
The main advantage of trading using opposite Fram Skandinavien and Wise Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fram Skandinavien position performs unexpectedly, Wise Group 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 Wise Group will offset losses from the drop in Wise Group's long position.| Fram Skandinavien vs. Greater Than AB | Fram Skandinavien vs. Diadrom Holding AB | Fram Skandinavien vs. Corline Biomedical AB | Fram Skandinavien vs. BIMobject AB |
| Wise Group vs. Rottneros AB | Wise Group vs. Dedicare AB | Wise Group vs. XANO Industri AB | Wise Group vs. Svedbergs i Dalstorp |
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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