Correlation Between Generic Sweden and Avensia Publ
Can any of the company-specific risk be diversified away by investing in both Generic Sweden and Avensia Publ 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 Avensia Publ 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 Avensia publ AB, you can compare the effects of market volatilities on Generic Sweden and Avensia Publ 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 Avensia Publ. Check out your portfolio center. Please also check ongoing floating volatility patterns of Generic Sweden and Avensia Publ.
Diversification Opportunities for Generic Sweden and Avensia Publ
-0.1 | Correlation Coefficient |
Good diversification
The 3 months correlation between Generic and Avensia is -0.1. Overlapping area represents the amount of risk that can be diversified away by holding Generic Sweden publ and Avensia publ AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Avensia publ 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 Avensia Publ. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Avensia publ AB has no effect on the direction of Generic Sweden i.e., Generic Sweden and Avensia Publ go up and down completely randomly.
Pair Corralation between Generic Sweden and Avensia Publ
Assuming the 90 days trading horizon Generic Sweden publ is expected to generate 0.87 times more return on investment than Avensia Publ. However, Generic Sweden publ is 1.15 times less risky than Avensia Publ. It trades about 0.05 of its potential returns per unit of risk. Avensia publ AB is currently generating about -0.03 per unit of risk. If you would invest 3,352 in Generic Sweden publ on August 28, 2024 and sell it today you would earn a total of 1,788 from holding Generic Sweden publ or generate 53.34% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Generic Sweden publ vs. Avensia publ AB
Performance |
| Timeline |
| Generic Sweden publ |
| Avensia publ AB |
Generic Sweden and Avensia Publ Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Generic Sweden and Avensia Publ
The main advantage of trading using opposite Generic Sweden and Avensia Publ positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Generic Sweden position performs unexpectedly, Avensia Publ 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 Avensia Publ will offset losses from the drop in Avensia Publ's long position.| Generic Sweden vs. FormPipe Software AB | Generic Sweden vs. Novotek AB | Generic Sweden vs. Hanza AB | Generic Sweden vs. Genovis AB |
| Avensia Publ vs. Svedbergs i Dalstorp | Avensia Publ vs. Know IT AB | Avensia Publ vs. FormPipe Software 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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.
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