Correlation Between Holmen AB and Vicore Pharma
Can any of the company-specific risk be diversified away by investing in both Holmen AB and Vicore Pharma 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 Holmen AB and Vicore Pharma into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Holmen AB and Vicore Pharma Holding, you can compare the effects of market volatilities on Holmen AB and Vicore Pharma 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 Holmen AB with a short position of Vicore Pharma. Check out your portfolio center. Please also check ongoing floating volatility patterns of Holmen AB and Vicore Pharma.
Diversification Opportunities for Holmen AB and Vicore Pharma
-0.44 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Holmen and Vicore is -0.44. Overlapping area represents the amount of risk that can be diversified away by holding Holmen AB and Vicore Pharma Holding in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Vicore Pharma Holding and Holmen 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 Holmen AB are associated (or correlated) with Vicore Pharma. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Vicore Pharma Holding has no effect on the direction of Holmen AB i.e., Holmen AB and Vicore Pharma go up and down completely randomly.
Pair Corralation between Holmen AB and Vicore Pharma
Assuming the 90 days trading horizon Holmen AB is expected to generate 0.26 times more return on investment than Vicore Pharma. However, Holmen AB is 3.84 times less risky than Vicore Pharma. It trades about -0.01 of its potential returns per unit of risk. Vicore Pharma Holding is currently generating about -0.03 per unit of risk. If you would invest 42,099 in Holmen AB on August 25, 2024 and sell it today you would lose (1,299) from holding Holmen AB or give up 3.09% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Holmen AB vs. Vicore Pharma Holding
Performance |
| Timeline |
| Holmen AB |
| Vicore Pharma Holding |
Holmen AB and Vicore Pharma Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Holmen AB and Vicore Pharma
The main advantage of trading using opposite Holmen AB and Vicore Pharma positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Holmen AB position performs unexpectedly, Vicore Pharma 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 Vicore Pharma will offset losses from the drop in Vicore Pharma's long position.| Holmen AB vs. Tele2 AB | Holmen AB vs. Stora Enso Oyj | Holmen AB vs. BillerudKorsnas AB | Holmen AB vs. Svenska Cellulosa Aktiebolaget |
| Vicore Pharma vs. Bavarian Nordic | Vicore Pharma vs. BioPorto | Vicore Pharma vs. Zaptec AS | Vicore Pharma vs. cBrain AS |
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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
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