Correlation Between Indutrade and FlexQube
Can any of the company-specific risk be diversified away by investing in both Indutrade and FlexQube 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 FlexQube into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Indutrade AB and FlexQube AB, you can compare the effects of market volatilities on Indutrade and FlexQube 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 FlexQube. Check out your portfolio center. Please also check ongoing floating volatility patterns of Indutrade and FlexQube.
Diversification Opportunities for Indutrade and FlexQube
Very weak diversification
The 3 months correlation between Indutrade and FlexQube is 0.52. Overlapping area represents the amount of risk that can be diversified away by holding Indutrade AB and FlexQube AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on FlexQube 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 FlexQube. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of FlexQube AB has no effect on the direction of Indutrade i.e., Indutrade and FlexQube go up and down completely randomly.
Pair Corralation between Indutrade and FlexQube
Assuming the 90 days trading horizon Indutrade AB is expected to generate 0.4 times more return on investment than FlexQube. However, Indutrade AB is 2.49 times less risky than FlexQube. It trades about -0.13 of its potential returns per unit of risk. FlexQube AB is currently generating about -0.09 per unit of risk. If you would invest 29,020 in Indutrade AB on August 31, 2024 and sell it today you would lose (1,180) from holding Indutrade AB or give up 4.07% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Indutrade AB vs. FlexQube AB
Performance |
| Timeline |
| Indutrade AB |
| FlexQube AB |
Indutrade and FlexQube Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Indutrade and FlexQube
The main advantage of trading using opposite Indutrade and FlexQube positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Indutrade position performs unexpectedly, FlexQube 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 FlexQube will offset losses from the drop in FlexQube's long position.| Indutrade vs. Samhllsbyggnadsbolaget i Norden | Indutrade vs. Sinch AB | Indutrade vs. Embracer Group AB | Indutrade vs. Evolution AB |
| FlexQube vs. Addtech AB | FlexQube vs. Indutrade AB | FlexQube vs. Lifco AB | FlexQube vs. NIBE Industrier 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 Transaction History module to view history of all your transactions and understand their impact on performance.
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