Correlation Between Getinge AB and VBG Group
Can any of the company-specific risk be diversified away by investing in both Getinge AB and VBG 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 Getinge AB and VBG Group into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Getinge AB ser and VBG Group AB, you can compare the effects of market volatilities on Getinge AB and VBG 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 Getinge AB with a short position of VBG Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of Getinge AB and VBG Group.
Diversification Opportunities for Getinge AB and VBG Group
0.63 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Getinge and VBG is 0.63. Overlapping area represents the amount of risk that can be diversified away by holding Getinge AB ser and VBG Group AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on VBG Group AB and Getinge 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 Getinge AB ser are associated (or correlated) with VBG Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of VBG Group AB has no effect on the direction of Getinge AB i.e., Getinge AB and VBG Group go up and down completely randomly.
Pair Corralation between Getinge AB and VBG Group
Assuming the 90 days trading horizon Getinge AB ser is expected to generate 0.76 times more return on investment than VBG Group. However, Getinge AB ser is 1.31 times less risky than VBG Group. It trades about 0.41 of its potential returns per unit of risk. VBG Group AB is currently generating about -0.19 per unit of risk. If you would invest 17,405 in Getinge AB ser on October 16, 2024 and sell it today you would earn a total of 1,300 from holding Getinge AB ser or generate 7.47% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 93.75% |
| Values | Daily Returns |
Getinge AB ser vs. VBG Group AB
Performance |
| Timeline |
| Getinge AB ser |
| VBG Group AB |
Getinge AB and VBG Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Getinge AB and VBG Group
The main advantage of trading using opposite Getinge AB and VBG Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Getinge AB position performs unexpectedly, VBG 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 VBG Group will offset losses from the drop in VBG Group's long position.The idea behind Getinge AB ser and VBG Group AB pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| VBG Group vs. Inwido AB | VBG Group vs. Proact IT Group | VBG Group vs. New Wave Group | VBG Group vs. Systemair 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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