Correlation Between Holmen AB and Abliva AB
Can any of the company-specific risk be diversified away by investing in both Holmen AB and Abliva 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 Holmen AB and Abliva AB into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Holmen AB and Abliva AB, you can compare the effects of market volatilities on Holmen AB and Abliva 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 Holmen AB with a short position of Abliva AB. Check out your portfolio center. Please also check ongoing floating volatility patterns of Holmen AB and Abliva AB.
Diversification Opportunities for Holmen AB and Abliva AB
Very good diversification
The 3 months correlation between Holmen and Abliva is -0.35. Overlapping area represents the amount of risk that can be diversified away by holding Holmen AB and Abliva AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Abliva AB 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 Abliva AB. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Abliva AB has no effect on the direction of Holmen AB i.e., Holmen AB and Abliva AB go up and down completely randomly.
Pair Corralation between Holmen AB and Abliva AB
Assuming the 90 days trading horizon Holmen AB is expected to generate 1.75 times less return on investment than Abliva AB. But when comparing it to its historical volatility, Holmen AB is 1.14 times less risky than Abliva AB. It trades about 0.12 of its potential returns per unit of risk. Abliva AB is currently generating about 0.18 of returns per unit of risk over similar time horizon. If you would invest 42.00 in Abliva AB on November 7, 2024 and sell it today you would earn a total of 2.00 from holding Abliva AB or generate 4.76% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.24% |
| Values | Daily Returns |
Holmen AB vs. Abliva AB
Performance |
| Timeline |
| Holmen AB |
| Abliva AB |
Holmen AB and Abliva AB Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Holmen AB and Abliva AB
The main advantage of trading using opposite Holmen AB and Abliva AB positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Holmen AB position performs unexpectedly, Abliva 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 Abliva AB will offset losses from the drop in Abliva AB's long position.| Holmen AB vs. Svenska Cellulosa Aktiebolaget | Holmen AB vs. BillerudKorsnas AB | Holmen AB vs. Boliden AB | Holmen AB vs. Husqvarna AB |
| Abliva AB vs. Oncopeptides AB | Abliva AB vs. Camurus AB | Abliva AB vs. Hansa Biopharma AB | Abliva AB vs. Cantargia 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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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