Correlation Between IAR Systems and OssDsign
Can any of the company-specific risk be diversified away by investing in both IAR Systems and OssDsign 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 OssDsign 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 OssDsign AB, you can compare the effects of market volatilities on IAR Systems and OssDsign 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 OssDsign. Check out your portfolio center. Please also check ongoing floating volatility patterns of IAR Systems and OssDsign.
Diversification Opportunities for IAR Systems and OssDsign
-0.13 | Correlation Coefficient |
Good diversification
The 3 months correlation between IAR and OssDsign is -0.13. Overlapping area represents the amount of risk that can be diversified away by holding IAR Systems Group and OssDsign AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on OssDsign 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 OssDsign. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of OssDsign AB has no effect on the direction of IAR Systems i.e., IAR Systems and OssDsign go up and down completely randomly.
Pair Corralation between IAR Systems and OssDsign
Assuming the 90 days trading horizon IAR Systems is expected to generate 2.09 times less return on investment than OssDsign. But when comparing it to its historical volatility, IAR Systems Group is 1.81 times less risky than OssDsign. It trades about 0.34 of its potential returns per unit of risk. OssDsign AB is currently generating about 0.39 of returns per unit of risk over similar time horizon. If you would invest 622.00 in OssDsign AB on September 4, 2024 and sell it today you would earn a total of 281.00 from holding OssDsign AB or generate 45.18% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
IAR Systems Group vs. OssDsign AB
Performance |
| Timeline |
| IAR Systems Group |
| OssDsign AB |
IAR Systems and OssDsign Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with IAR Systems and OssDsign
The main advantage of trading using opposite IAR Systems and OssDsign positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if IAR Systems position performs unexpectedly, OssDsign 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 OssDsign will offset losses from the drop in OssDsign'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 |
| OssDsign vs. iZafe Group AB | OssDsign vs. Triboron International AB | OssDsign vs. KABE Group AB | OssDsign 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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.
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