Correlation Between IAR Systems and NetJobs Group
Can any of the company-specific risk be diversified away by investing in both IAR Systems and NetJobs Group 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 NetJobs Group 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 NetJobs Group AB, you can compare the effects of market volatilities on IAR Systems and NetJobs Group 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 NetJobs Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of IAR Systems and NetJobs Group.
Diversification Opportunities for IAR Systems and NetJobs Group
0.21 | Correlation Coefficient |
Modest diversification
The 3 months correlation between IAR and NetJobs is 0.21. Overlapping area represents the amount of risk that can be diversified away by holding IAR Systems Group and NetJobs Group AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NetJobs Group 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 NetJobs Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NetJobs Group AB has no effect on the direction of IAR Systems i.e., IAR Systems and NetJobs Group go up and down completely randomly.
Pair Corralation between IAR Systems and NetJobs Group
Assuming the 90 days trading horizon IAR Systems Group is expected to generate 0.57 times more return on investment than NetJobs Group. However, IAR Systems Group is 1.76 times less risky than NetJobs Group. It trades about 0.08 of its potential returns per unit of risk. NetJobs Group AB is currently generating about -0.11 per unit of risk. If you would invest 12,600 in IAR Systems Group on August 27, 2024 and sell it today you would earn a total of 350.00 from holding IAR Systems Group or generate 2.78% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
IAR Systems Group vs. NetJobs Group AB
Performance |
| Timeline |
| IAR Systems Group |
| NetJobs Group AB |
IAR Systems and NetJobs Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with IAR Systems and NetJobs Group
The main advantage of trading using opposite IAR Systems and NetJobs Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if IAR Systems position performs unexpectedly, NetJobs Group 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 NetJobs Group will offset losses from the drop in NetJobs Group'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 |
| NetJobs Group vs. Addtech AB | NetJobs Group vs. Teqnion AB | NetJobs Group vs. Vitec Software Group | NetJobs Group vs. Lagercrantz Group 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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.
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