Correlation Between Genovis AB and Arcoma AB
Can any of the company-specific risk be diversified away by investing in both Genovis AB and Arcoma AB 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 Genovis AB and Arcoma AB into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Genovis AB and Arcoma AB, you can compare the effects of market volatilities on Genovis AB and Arcoma AB 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 Genovis AB with a short position of Arcoma AB. Check out your portfolio center. Please also check ongoing floating volatility patterns of Genovis AB and Arcoma AB.
Diversification Opportunities for Genovis AB and Arcoma AB
-0.3 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Genovis and Arcoma is -0.3. Overlapping area represents the amount of risk that can be diversified away by holding Genovis AB and Arcoma AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Arcoma AB and Genovis 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 Genovis AB are associated (or correlated) with Arcoma AB. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Arcoma AB has no effect on the direction of Genovis AB i.e., Genovis AB and Arcoma AB go up and down completely randomly.
Pair Corralation between Genovis AB and Arcoma AB
Assuming the 90 days trading horizon Genovis AB is expected to under-perform the Arcoma AB. In addition to that, Genovis AB is 1.16 times more volatile than Arcoma AB. It trades about -0.08 of its total potential returns per unit of risk. Arcoma AB is currently generating about -0.02 per unit of volatility. If you would invest 1,075 in Arcoma AB on September 12, 2024 and sell it today you would lose (15.00) from holding Arcoma AB or give up 1.4% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Genovis AB vs. Arcoma AB
Performance |
| Timeline |
| Genovis AB |
| Arcoma AB |
Genovis AB and Arcoma AB Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Genovis AB and Arcoma AB
The main advantage of trading using opposite Genovis AB and Arcoma AB positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Genovis AB position performs unexpectedly, Arcoma AB 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 Arcoma AB will offset losses from the drop in Arcoma AB's long position.| Genovis AB vs. AVTECH Sweden AB | Genovis AB vs. Catena Media plc | Genovis AB vs. Nordic Asia Investment | Genovis AB vs. Fractal Gaming Group |
| Arcoma AB vs. Stille AB | Arcoma AB vs. Avensia publ AB | Arcoma AB vs. Genovis AB | Arcoma AB vs. aXichem 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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.
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