Correlation Between Indutrade and Elekta AB
Can any of the company-specific risk be diversified away by investing in both Indutrade and Elekta 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 Elekta 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 Elekta AB, you can compare the effects of market volatilities on Indutrade and Elekta 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 Elekta AB. Check out your portfolio center. Please also check ongoing floating volatility patterns of Indutrade and Elekta AB.
Diversification Opportunities for Indutrade and Elekta AB
Poor diversification
The 3 months correlation between Indutrade and Elekta is 0.65. Overlapping area represents the amount of risk that can be diversified away by holding Indutrade AB and Elekta AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Elekta 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 Elekta AB. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Elekta AB has no effect on the direction of Indutrade i.e., Indutrade and Elekta AB go up and down completely randomly.
Pair Corralation between Indutrade and Elekta AB
Assuming the 90 days trading horizon Indutrade AB is expected to generate 0.9 times more return on investment than Elekta AB. However, Indutrade AB is 1.11 times less risky than Elekta AB. It trades about 0.03 of its potential returns per unit of risk. Elekta AB is currently generating about 0.02 per unit of risk. If you would invest 22,097 in Indutrade AB on August 26, 2024 and sell it today you would earn a total of 4,923 from holding Indutrade AB or generate 22.28% 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. Elekta AB
Performance |
| Timeline |
| Indutrade AB |
| Elekta AB |
Indutrade and Elekta AB Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Indutrade and Elekta AB
The main advantage of trading using opposite Indutrade and Elekta AB positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Indutrade position performs unexpectedly, Elekta 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 Elekta AB will offset losses from the drop in Elekta AB's long position.| Indutrade vs. Lifco AB | Indutrade vs. Addtech AB | Indutrade vs. NIBE Industrier AB | Indutrade vs. Investment AB Latour |
| Elekta AB vs. Addtech AB | Elekta AB vs. Lifco AB | Elekta AB vs. Indutrade AB | Elekta AB 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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
Other Complementary Tools
| Balance Of Power Check stock momentum by analyzing Balance Of Power indicator and other technical ratios | |
| Idea Breakdown Analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes | |
| Price Transformation Use Price Transformation models to analyze the depth of different equity instruments across global markets | |
| Portfolio Dashboard Portfolio dashboard that provides centralized access to all your investments | |
| Headlines Timeline Stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity |