Correlation Between IAR Systems and Acuvi AB
Can any of the company-specific risk be diversified away by investing in both IAR Systems and Acuvi 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 IAR Systems and Acuvi AB into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between IAR Systems Group and Acuvi AB, you can compare the effects of market volatilities on IAR Systems and Acuvi 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 IAR Systems with a short position of Acuvi AB. Check out your portfolio center. Please also check ongoing floating volatility patterns of IAR Systems and Acuvi AB.
Diversification Opportunities for IAR Systems and Acuvi AB
0.23 | Correlation Coefficient |
Modest diversification
The 3 months correlation between IAR and Acuvi is 0.23. Overlapping area represents the amount of risk that can be diversified away by holding IAR Systems Group and Acuvi AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Acuvi AB and IAR Systems 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 IAR Systems Group are associated (or correlated) with Acuvi AB. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Acuvi AB has no effect on the direction of IAR Systems i.e., IAR Systems and Acuvi AB go up and down completely randomly.
Pair Corralation between IAR Systems and Acuvi AB
Assuming the 90 days trading horizon IAR Systems is expected to generate 4.13 times less return on investment than Acuvi AB. But when comparing it to its historical volatility, IAR Systems Group is 1.39 times less risky than Acuvi AB. It trades about 0.0 of its potential returns per unit of risk. Acuvi AB is currently generating about 0.0 of returns per unit of risk over similar time horizon. If you would invest 1,956 in Acuvi AB on August 26, 2024 and sell it today you would lose (466.00) from holding Acuvi AB or give up 23.82% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
IAR Systems Group vs. Acuvi AB
Performance |
| Timeline |
| IAR Systems Group |
| Acuvi AB |
IAR Systems and Acuvi AB Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with IAR Systems and Acuvi AB
The main advantage of trading using opposite IAR Systems and Acuvi AB positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if IAR Systems position performs unexpectedly, Acuvi 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 Acuvi AB will offset losses from the drop in Acuvi AB's long position.| IAR Systems vs. Lifco AB | IAR Systems vs. Lagercrantz Group AB | IAR Systems vs. Addtech AB | IAR Systems vs. Instalco Intressenter AB |
| Acuvi AB vs. Divio Technologies AB | Acuvi AB vs. XMReality AB | Acuvi AB vs. KABE Group AB | Acuvi AB vs. IAR Systems Group |
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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.
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