Correlation Between Garo AB and Sdiptech
Can any of the company-specific risk be diversified away by investing in both Garo AB and Sdiptech 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 Sdiptech into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Garo AB and Sdiptech AB, you can compare the effects of market volatilities on Garo AB and Sdiptech 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 Sdiptech. Check out your portfolio center. Please also check ongoing floating volatility patterns of Garo AB and Sdiptech.
Diversification Opportunities for Garo AB and Sdiptech
Very poor diversification
The 3 months correlation between Garo and Sdiptech is 0.8. Overlapping area represents the amount of risk that can be diversified away by holding Garo AB and Sdiptech AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sdiptech AB 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 Sdiptech. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sdiptech AB has no effect on the direction of Garo AB i.e., Garo AB and Sdiptech go up and down completely randomly.
Pair Corralation between Garo AB and Sdiptech
Assuming the 90 days trading horizon Garo AB is expected to under-perform the Sdiptech. In addition to that, Garo AB is 1.23 times more volatile than Sdiptech AB. It trades about -0.1 of its total potential returns per unit of risk. Sdiptech AB is currently generating about 0.01 per unit of volatility. If you would invest 24,652 in Sdiptech AB on September 2, 2024 and sell it today you would lose (1,772) from holding Sdiptech AB or give up 7.19% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Garo AB vs. Sdiptech AB
Performance |
| Timeline |
| Garo AB |
| Sdiptech AB |
Garo AB and Sdiptech Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Garo AB and Sdiptech
The main advantage of trading using opposite Garo AB and Sdiptech positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Garo AB position performs unexpectedly, Sdiptech 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 Sdiptech will offset losses from the drop in Sdiptech's long position.| Garo AB vs. Samhllsbyggnadsbolaget i Norden | Garo AB vs. Sinch AB | Garo AB vs. Embracer Group AB | Garo AB vs. Evolution AB |
| Sdiptech vs. Bergman Beving AB | Sdiptech vs. FM Mattsson Mora | Sdiptech vs. Systemair AB | Sdiptech vs. Garo 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 Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.
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