Correlation Between Indutrade and Ferronordic
Can any of the company-specific risk be diversified away by investing in both Indutrade and Ferronordic 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 Ferronordic into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Indutrade AB and Ferronordic AB, you can compare the effects of market volatilities on Indutrade and Ferronordic 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 Ferronordic. Check out your portfolio center. Please also check ongoing floating volatility patterns of Indutrade and Ferronordic.
Diversification Opportunities for Indutrade and Ferronordic
0.49 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Indutrade and Ferronordic is 0.49. Overlapping area represents the amount of risk that can be diversified away by holding Indutrade AB and Ferronordic AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ferronordic 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 Ferronordic. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ferronordic AB has no effect on the direction of Indutrade i.e., Indutrade and Ferronordic go up and down completely randomly.
Pair Corralation between Indutrade and Ferronordic
Assuming the 90 days trading horizon Indutrade AB is expected to under-perform the Ferronordic. But the stock apears to be less risky and, when comparing its historical volatility, Indutrade AB is 1.5 times less risky than Ferronordic. The stock trades about -0.01 of its potential returns per unit of risk. The Ferronordic AB is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest 5,920 in Ferronordic AB on September 13, 2024 and sell it today you would earn a total of 180.00 from holding Ferronordic AB or generate 3.04% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Indutrade AB vs. Ferronordic AB
Performance |
| Timeline |
| Indutrade AB |
| Ferronordic AB |
Indutrade and Ferronordic Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Indutrade and Ferronordic
The main advantage of trading using opposite Indutrade and Ferronordic positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Indutrade position performs unexpectedly, Ferronordic 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 Ferronordic will offset losses from the drop in Ferronordic's long position.| Indutrade vs. Skandinaviska Enskilda Banken | Indutrade vs. Skandinaviska Enskilda Banken | Indutrade vs. Swedbank AB | Indutrade vs. Svenska Handelsbanken AB |
| Ferronordic vs. Lohilo Foods AB | Ferronordic vs. Lime Technologies AB | Ferronordic vs. Swedbank AB | Ferronordic vs. Bio Works Technologies 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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.
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