Correlation Between Indutrade and Doxa AB
Can any of the company-specific risk be diversified away by investing in both Indutrade and Doxa AB 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 Indutrade and Doxa AB into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Indutrade AB and Doxa AB, you can compare the effects of market volatilities on Indutrade and Doxa AB 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 Indutrade with a short position of Doxa AB. Check out your portfolio center. Please also check ongoing floating volatility patterns of Indutrade and Doxa AB.
Diversification Opportunities for Indutrade and Doxa AB
Poor diversification
The 3 months correlation between Indutrade and Doxa is 0.63. Overlapping area represents the amount of risk that can be diversified away by holding Indutrade AB and Doxa AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Doxa AB and Indutrade 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 Indutrade AB are associated (or correlated) with Doxa AB. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Doxa AB has no effect on the direction of Indutrade i.e., Indutrade and Doxa AB go up and down completely randomly.
Pair Corralation between Indutrade and Doxa AB
Assuming the 90 days trading horizon Indutrade AB is expected to generate 0.54 times more return on investment than Doxa AB. However, Indutrade AB is 1.85 times less risky than Doxa AB. It trades about 0.03 of its potential returns per unit of risk. Doxa AB is currently generating about -0.08 per unit of risk. If you would invest 22,097 in Indutrade AB on August 24, 2024 and sell it today you would earn a total of 4,863 from holding Indutrade AB or generate 22.01% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Indutrade AB vs. Doxa AB
Performance |
| Timeline |
| Indutrade AB |
| Doxa AB |
Indutrade and Doxa AB Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Indutrade and Doxa AB
The main advantage of trading using opposite Indutrade and Doxa AB positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Indutrade position performs unexpectedly, Doxa AB 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 Doxa AB will offset losses from the drop in Doxa AB's long position.| Indutrade vs. Addtech AB | Indutrade vs. Teqnion AB | Indutrade vs. Vitec Software Group | Indutrade 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 Portfolio Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.
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