Correlation Between Industrivarden and Cint Group
Can any of the company-specific risk be diversified away by investing in both Industrivarden and Cint Group 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 Industrivarden and Cint Group into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Industrivarden AB ser and Cint Group AB, you can compare the effects of market volatilities on Industrivarden and Cint Group 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 Industrivarden with a short position of Cint Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of Industrivarden and Cint Group.
Diversification Opportunities for Industrivarden and Cint Group
-0.88 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Industrivarden and Cint is -0.88. Overlapping area represents the amount of risk that can be diversified away by holding Industrivarden AB ser and Cint Group AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cint Group AB and Industrivarden 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 Industrivarden AB ser are associated (or correlated) with Cint Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cint Group AB has no effect on the direction of Industrivarden i.e., Industrivarden and Cint Group go up and down completely randomly.
Pair Corralation between Industrivarden and Cint Group
Assuming the 90 days trading horizon Industrivarden AB ser is expected to generate 0.28 times more return on investment than Cint Group. However, Industrivarden AB ser is 3.6 times less risky than Cint Group. It trades about 0.04 of its potential returns per unit of risk. Cint Group AB is currently generating about -0.17 per unit of risk. If you would invest 39,420 in Industrivarden AB ser on December 10, 2024 and sell it today you would earn a total of 410.00 from holding Industrivarden AB ser or generate 1.04% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Industrivarden AB ser vs. Cint Group AB
Performance |
| Timeline |
| Industrivarden AB ser |
| Cint Group AB |
Industrivarden and Cint Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Industrivarden and Cint Group
The main advantage of trading using opposite Industrivarden and Cint Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Industrivarden position performs unexpectedly, Cint Group 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 Cint Group will offset losses from the drop in Cint Group's long position.| Industrivarden vs. Investor AB ser | ||
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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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.
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