Correlation Between IAR Systems and Greater Than
Can any of the company-specific risk be diversified away by investing in both IAR Systems and Greater Than 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 Greater Than 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 Greater Than AB, you can compare the effects of market volatilities on IAR Systems and Greater Than 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 Greater Than. Check out your portfolio center. Please also check ongoing floating volatility patterns of IAR Systems and Greater Than.
Diversification Opportunities for IAR Systems and Greater Than
0.12 | Correlation Coefficient |
Average diversification
The 3 months correlation between IAR and Greater is 0.12. Overlapping area represents the amount of risk that can be diversified away by holding IAR Systems Group and Greater Than AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Greater Than 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 Greater Than. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Greater Than AB has no effect on the direction of IAR Systems i.e., IAR Systems and Greater Than go up and down completely randomly.
Pair Corralation between IAR Systems and Greater Than
Assuming the 90 days trading horizon IAR Systems is expected to generate 3.22 times less return on investment than Greater Than. But when comparing it to its historical volatility, IAR Systems Group is 1.72 times less risky than Greater Than. It trades about 0.15 of its potential returns per unit of risk. Greater Than AB is currently generating about 0.29 of returns per unit of risk over similar time horizon. If you would invest 2,850 in Greater Than AB on November 5, 2024 and sell it today you would earn a total of 870.00 from holding Greater Than AB or generate 30.53% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 95.0% |
| Values | Daily Returns |
IAR Systems Group vs. Greater Than AB
Performance |
| Timeline |
| IAR Systems Group |
| Greater Than AB |
IAR Systems and Greater Than Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with IAR Systems and Greater Than
The main advantage of trading using opposite IAR Systems and Greater Than positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if IAR Systems position performs unexpectedly, Greater Than 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 Greater Than will offset losses from the drop in Greater Than's long position.| IAR Systems vs. CellaVision AB | IAR Systems vs. HMS Networks AB | IAR Systems vs. Enea AB | IAR Systems vs. Know IT AB |
| Greater Than vs. BIMobject AB | Greater Than vs. IAR Systems Group | Greater Than vs. FormPipe Software AB | Greater Than vs. Generic Sweden publ |
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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.
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