Correlation Between Generic Sweden and Alcadon Group
Can any of the company-specific risk be diversified away by investing in both Generic Sweden and Alcadon 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 Generic Sweden and Alcadon Group into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Generic Sweden publ and Alcadon Group AB, you can compare the effects of market volatilities on Generic Sweden and Alcadon 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 Generic Sweden with a short position of Alcadon Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of Generic Sweden and Alcadon Group.
Diversification Opportunities for Generic Sweden and Alcadon Group
-0.36 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Generic and Alcadon is -0.36. Overlapping area represents the amount of risk that can be diversified away by holding Generic Sweden publ and Alcadon Group AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Alcadon Group AB and Generic Sweden 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 Generic Sweden publ are associated (or correlated) with Alcadon Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Alcadon Group AB has no effect on the direction of Generic Sweden i.e., Generic Sweden and Alcadon Group go up and down completely randomly.
Pair Corralation between Generic Sweden and Alcadon Group
Assuming the 90 days trading horizon Generic Sweden publ is expected to generate 1.41 times more return on investment than Alcadon Group. However, Generic Sweden is 1.41 times more volatile than Alcadon Group AB. It trades about 0.18 of its potential returns per unit of risk. Alcadon Group AB is currently generating about -0.21 per unit of risk. If you would invest 4,400 in Generic Sweden publ on September 1, 2024 and sell it today you would earn a total of 510.00 from holding Generic Sweden publ or generate 11.59% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.65% |
| Values | Daily Returns |
Generic Sweden publ vs. Alcadon Group AB
Performance |
| Timeline |
| Generic Sweden publ |
| Alcadon Group AB |
Generic Sweden and Alcadon Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Generic Sweden and Alcadon Group
The main advantage of trading using opposite Generic Sweden and Alcadon Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Generic Sweden position performs unexpectedly, Alcadon 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 Alcadon Group will offset losses from the drop in Alcadon Group's long position.| Generic Sweden vs. Enea AB | Generic Sweden vs. Novotek AB | Generic Sweden vs. Addnode Group AB | Generic Sweden vs. Softronic AB |
| Alcadon Group vs. DistIT AB | Alcadon Group vs. Addnode Group AB | Alcadon Group vs. Awardit AB | Alcadon Group vs. Avensia publ 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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.
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