Correlation Between Idun Industrier and AstraZeneca PLC
Can any of the company-specific risk be diversified away by investing in both Idun Industrier and AstraZeneca PLC 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 Idun Industrier and AstraZeneca PLC into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Idun Industrier AB and AstraZeneca PLC, you can compare the effects of market volatilities on Idun Industrier and AstraZeneca PLC 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 Idun Industrier with a short position of AstraZeneca PLC. Check out your portfolio center. Please also check ongoing floating volatility patterns of Idun Industrier and AstraZeneca PLC.
Diversification Opportunities for Idun Industrier and AstraZeneca PLC
0.14 | Correlation Coefficient |
Average diversification
The 3 months correlation between Idun and AstraZeneca is 0.14. Overlapping area represents the amount of risk that can be diversified away by holding Idun Industrier AB and AstraZeneca PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AstraZeneca PLC and Idun Industrier 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 Idun Industrier AB are associated (or correlated) with AstraZeneca PLC. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AstraZeneca PLC has no effect on the direction of Idun Industrier i.e., Idun Industrier and AstraZeneca PLC go up and down completely randomly.
Pair Corralation between Idun Industrier and AstraZeneca PLC
Assuming the 90 days trading horizon Idun Industrier AB is expected to generate 1.01 times more return on investment than AstraZeneca PLC. However, Idun Industrier is 1.01 times more volatile than AstraZeneca PLC. It trades about 0.04 of its potential returns per unit of risk. AstraZeneca PLC is currently generating about -0.24 per unit of risk. If you would invest 33,500 in Idun Industrier AB on January 23, 2025 and sell it today you would earn a total of 500.00 from holding Idun Industrier AB or generate 1.49% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Idun Industrier AB vs. AstraZeneca PLC
Performance |
| Timeline |
| Idun Industrier AB |
| AstraZeneca PLC |
Idun Industrier and AstraZeneca PLC Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Idun Industrier and AstraZeneca PLC
The main advantage of trading using opposite Idun Industrier and AstraZeneca PLC positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Idun Industrier position performs unexpectedly, AstraZeneca PLC 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 AstraZeneca PLC will offset losses from the drop in AstraZeneca PLC's long position.| Idun Industrier vs. I Tech | Idun Industrier vs. GiG Software PLC | Idun Industrier vs. Upsales Technology AB | Idun Industrier vs. Addtech AB |
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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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.
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