Correlation Between IAR Systems and Swedencare Publ
Can any of the company-specific risk be diversified away by investing in both IAR Systems and Swedencare Publ 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 Swedencare Publ 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 Swedencare publ AB, you can compare the effects of market volatilities on IAR Systems and Swedencare Publ 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 Swedencare Publ. Check out your portfolio center. Please also check ongoing floating volatility patterns of IAR Systems and Swedencare Publ.
Diversification Opportunities for IAR Systems and Swedencare Publ
-0.46 | Correlation Coefficient |
Very good diversification
The 3 months correlation between IAR and Swedencare is -0.46. Overlapping area represents the amount of risk that can be diversified away by holding IAR Systems Group and Swedencare publ AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Swedencare publ 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 Swedencare Publ. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Swedencare publ AB has no effect on the direction of IAR Systems i.e., IAR Systems and Swedencare Publ go up and down completely randomly.
Pair Corralation between IAR Systems and Swedencare Publ
Assuming the 90 days trading horizon IAR Systems Group is expected to under-perform the Swedencare Publ. But the stock apears to be less risky and, when comparing its historical volatility, IAR Systems Group is 1.26 times less risky than Swedencare Publ. The stock trades about 0.0 of its potential returns per unit of risk. The Swedencare publ AB is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 3,081 in Swedencare publ AB on August 28, 2024 and sell it today you would earn a total of 1,627 from holding Swedencare publ AB or generate 52.81% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
IAR Systems Group vs. Swedencare publ AB
Performance |
| Timeline |
| IAR Systems Group |
| Swedencare publ AB |
IAR Systems and Swedencare Publ Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with IAR Systems and Swedencare Publ
The main advantage of trading using opposite IAR Systems and Swedencare Publ positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if IAR Systems position performs unexpectedly, Swedencare Publ 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 Swedencare Publ will offset losses from the drop in Swedencare Publ'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 |
| Swedencare Publ vs. Enzymatica publ AB | Swedencare Publ vs. KABE Group AB | Swedencare Publ vs. IAR Systems Group | Swedencare Publ vs. Mekonomen 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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.
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