Correlation Between Husqvarna and AB Electrolux
Can any of the company-specific risk be diversified away by investing in both Husqvarna and AB Electrolux 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 Husqvarna and AB Electrolux into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Husqvarna AB and AB Electrolux, you can compare the effects of market volatilities on Husqvarna and AB Electrolux 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 Husqvarna with a short position of AB Electrolux. Check out your portfolio center. Please also check ongoing floating volatility patterns of Husqvarna and AB Electrolux.
Diversification Opportunities for Husqvarna and AB Electrolux
0.48 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Husqvarna and ELUX-A is 0.48. Overlapping area represents the amount of risk that can be diversified away by holding Husqvarna AB and AB Electrolux in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AB Electrolux and Husqvarna 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 Husqvarna AB are associated (or correlated) with AB Electrolux. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AB Electrolux has no effect on the direction of Husqvarna i.e., Husqvarna and AB Electrolux go up and down completely randomly.
Pair Corralation between Husqvarna and AB Electrolux
Assuming the 90 days trading horizon Husqvarna AB is expected to under-perform the AB Electrolux. But the stock apears to be less risky and, when comparing its historical volatility, Husqvarna AB is 1.37 times less risky than AB Electrolux. The stock trades about -0.07 of its potential returns per unit of risk. The AB Electrolux is currently generating about 0.0 of returns per unit of risk over similar time horizon. If you would invest 11,100 in AB Electrolux on September 13, 2024 and sell it today you would lose (200.00) from holding AB Electrolux or give up 1.8% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Husqvarna AB vs. AB Electrolux
Performance |
| Timeline |
| Husqvarna AB |
| AB Electrolux |
Husqvarna and AB Electrolux Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Husqvarna and AB Electrolux
The main advantage of trading using opposite Husqvarna and AB Electrolux positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Husqvarna position performs unexpectedly, AB Electrolux 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 AB Electrolux will offset losses from the drop in AB Electrolux's long position.| Husqvarna vs. Husqvarna AB | Husqvarna vs. AB Electrolux | Husqvarna vs. Stora Enso Oyj | Husqvarna vs. Industrivarden AB ser |
| AB Electrolux vs. AB Electrolux | AB Electrolux vs. Tele2 AB | AB Electrolux vs. Husqvarna AB | AB Electrolux vs. Kinnevik Investment 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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.
Other Complementary Tools
| Aroon Oscillator Analyze current equity momentum using Aroon Oscillator and other momentum ratios | |
| Options Analysis Analyze and evaluate options and option chains as a potential hedge for your portfolios | |
| Equity Analysis Research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities | |
| Content Syndication Quickly integrate customizable finance content to your own investment portal | |
| Idea Optimizer Use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio |