Correlation Between Hydract AS and Aalborg Boldspilklub
Can any of the company-specific risk be diversified away by investing in both Hydract AS and Aalborg Boldspilklub 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 Hydract AS and Aalborg Boldspilklub into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Hydract AS and Aalborg Boldspilklub AS, you can compare the effects of market volatilities on Hydract AS and Aalborg Boldspilklub 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 Hydract AS with a short position of Aalborg Boldspilklub. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hydract AS and Aalborg Boldspilklub.
Diversification Opportunities for Hydract AS and Aalborg Boldspilklub
-0.56 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Hydract and Aalborg is -0.56. Overlapping area represents the amount of risk that can be diversified away by holding Hydract AS and Aalborg Boldspilklub AS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aalborg Boldspilklub and Hydract AS 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 Hydract AS are associated (or correlated) with Aalborg Boldspilklub. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aalborg Boldspilklub has no effect on the direction of Hydract AS i.e., Hydract AS and Aalborg Boldspilklub go up and down completely randomly.
Pair Corralation between Hydract AS and Aalborg Boldspilklub
Assuming the 90 days trading horizon Hydract AS is expected to generate 4.18 times more return on investment than Aalborg Boldspilklub. However, Hydract AS is 4.18 times more volatile than Aalborg Boldspilklub AS. It trades about 0.01 of its potential returns per unit of risk. Aalborg Boldspilklub AS is currently generating about -0.02 per unit of risk. If you would invest 552.00 in Hydract AS on November 5, 2024 and sell it today you would lose (502.00) from holding Hydract AS or give up 90.94% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hydract AS vs. Aalborg Boldspilklub AS
Performance |
| Timeline |
| Hydract AS |
| Aalborg Boldspilklub |
Hydract AS and Aalborg Boldspilklub Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hydract AS and Aalborg Boldspilklub
The main advantage of trading using opposite Hydract AS and Aalborg Boldspilklub positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hydract AS position performs unexpectedly, Aalborg Boldspilklub 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 Aalborg Boldspilklub will offset losses from the drop in Aalborg Boldspilklub's long position.| Hydract AS vs. Scandinavian Tobacco Group | Hydract AS vs. Sydbank AS | Hydract AS vs. Nordfyns Bank AS | Hydract AS vs. TROPHY GAMES Development |
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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 Portfolio Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.
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