Correlation Between Havsfrun Investment and Genovis AB
Can any of the company-specific risk be diversified away by investing in both Havsfrun Investment and Genovis 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 Havsfrun Investment and Genovis AB into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Havsfrun Investment AB and Genovis AB, you can compare the effects of market volatilities on Havsfrun Investment and Genovis 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 Havsfrun Investment with a short position of Genovis AB. Check out your portfolio center. Please also check ongoing floating volatility patterns of Havsfrun Investment and Genovis AB.
Diversification Opportunities for Havsfrun Investment and Genovis AB
0.32 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Havsfrun and Genovis is 0.32. Overlapping area represents the amount of risk that can be diversified away by holding Havsfrun Investment AB and Genovis AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Genovis AB and Havsfrun Investment 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 Havsfrun Investment AB are associated (or correlated) with Genovis AB. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Genovis AB has no effect on the direction of Havsfrun Investment i.e., Havsfrun Investment and Genovis AB go up and down completely randomly.
Pair Corralation between Havsfrun Investment and Genovis AB
Assuming the 90 days trading horizon Havsfrun Investment AB is expected to generate 0.82 times more return on investment than Genovis AB. However, Havsfrun Investment AB is 1.22 times less risky than Genovis AB. It trades about 0.02 of its potential returns per unit of risk. Genovis AB is currently generating about -0.01 per unit of risk. If you would invest 1,179 in Havsfrun Investment AB on September 3, 2024 and sell it today you would earn a total of 41.00 from holding Havsfrun Investment AB or generate 3.48% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Havsfrun Investment AB vs. Genovis AB
Performance |
| Timeline |
| Havsfrun Investment |
| Genovis AB |
Havsfrun Investment and Genovis AB Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Havsfrun Investment and Genovis AB
The main advantage of trading using opposite Havsfrun Investment and Genovis AB positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Havsfrun Investment position performs unexpectedly, Genovis 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 Genovis AB will offset losses from the drop in Genovis AB's long position.| Havsfrun Investment vs. NAXS Nordic Access | Havsfrun Investment vs. FormPipe Software AB | Havsfrun Investment vs. Novotek AB |
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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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
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