Correlation Between Garo AB and FM Mattsson
Can any of the company-specific risk be diversified away by investing in both Garo AB and FM Mattsson 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 Garo AB and FM Mattsson into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Garo AB and FM Mattsson Mora, you can compare the effects of market volatilities on Garo AB and FM Mattsson 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 Garo AB with a short position of FM Mattsson. Check out your portfolio center. Please also check ongoing floating volatility patterns of Garo AB and FM Mattsson.
Diversification Opportunities for Garo AB and FM Mattsson
-0.34 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Garo and FMM-B is -0.34. Overlapping area represents the amount of risk that can be diversified away by holding Garo AB and FM Mattsson Mora in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on FM Mattsson Mora and Garo 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 Garo AB are associated (or correlated) with FM Mattsson. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of FM Mattsson Mora has no effect on the direction of Garo AB i.e., Garo AB and FM Mattsson go up and down completely randomly.
Pair Corralation between Garo AB and FM Mattsson
Assuming the 90 days trading horizon Garo AB is expected to under-perform the FM Mattsson. In addition to that, Garo AB is 1.66 times more volatile than FM Mattsson Mora. It trades about -0.03 of its total potential returns per unit of risk. FM Mattsson Mora is currently generating about -0.02 per unit of volatility. If you would invest 5,059 in FM Mattsson Mora on October 26, 2024 and sell it today you would lose (309.00) from holding FM Mattsson Mora or give up 6.11% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Garo AB vs. FM Mattsson Mora
Performance |
| Timeline |
| Garo AB |
| FM Mattsson Mora |
Garo AB and FM Mattsson Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Garo AB and FM Mattsson
The main advantage of trading using opposite Garo AB and FM Mattsson positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Garo AB position performs unexpectedly, FM Mattsson 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 FM Mattsson will offset losses from the drop in FM Mattsson's long position.| Garo AB vs. Troax Group AB | Garo AB vs. NIBE Industrier AB | Garo AB vs. Hexatronic Group AB | Garo AB vs. Bufab Holding AB |
| FM Mattsson vs. Nordic Waterproofing Holding | FM Mattsson vs. Bufab Holding AB | FM Mattsson vs. Garo AB | FM Mattsson vs. Inwido 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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