Correlation Between IAR Systems and Havsfrun Investment
Can any of the company-specific risk be diversified away by investing in both IAR Systems and Havsfrun Investment 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 Havsfrun Investment 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 Havsfrun Investment AB, you can compare the effects of market volatilities on IAR Systems and Havsfrun Investment 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 Havsfrun Investment. Check out your portfolio center. Please also check ongoing floating volatility patterns of IAR Systems and Havsfrun Investment.
Diversification Opportunities for IAR Systems and Havsfrun Investment
-0.74 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between IAR and Havsfrun is -0.74. Overlapping area represents the amount of risk that can be diversified away by holding IAR Systems Group and Havsfrun Investment AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Havsfrun Investment 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 Havsfrun Investment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Havsfrun Investment has no effect on the direction of IAR Systems i.e., IAR Systems and Havsfrun Investment go up and down completely randomly.
Pair Corralation between IAR Systems and Havsfrun Investment
Assuming the 90 days trading horizon IAR Systems Group is expected to generate 0.97 times more return on investment than Havsfrun Investment. However, IAR Systems Group is 1.03 times less risky than Havsfrun Investment. It trades about 0.06 of its potential returns per unit of risk. Havsfrun Investment AB is currently generating about 0.02 per unit of risk. If you would invest 8,575 in IAR Systems Group on August 26, 2024 and sell it today you would earn a total of 4,225 from holding IAR Systems Group or generate 49.27% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
IAR Systems Group vs. Havsfrun Investment AB
Performance |
| Timeline |
| IAR Systems Group |
| Havsfrun Investment |
IAR Systems and Havsfrun Investment Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with IAR Systems and Havsfrun Investment
The main advantage of trading using opposite IAR Systems and Havsfrun Investment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if IAR Systems position performs unexpectedly, Havsfrun Investment 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 Havsfrun Investment will offset losses from the drop in Havsfrun Investment'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 |
| Havsfrun Investment vs. FormPipe Software AB | Havsfrun Investment vs. Novotek AB | Havsfrun Investment vs. KABE Group AB | Havsfrun Investment 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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..
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