Correlation Between Instalco Intressenter and Afry AB
Can any of the company-specific risk be diversified away by investing in both Instalco Intressenter and Afry 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 Instalco Intressenter and Afry AB into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Instalco Intressenter AB and Afry AB, you can compare the effects of market volatilities on Instalco Intressenter and Afry 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 Instalco Intressenter with a short position of Afry AB. Check out your portfolio center. Please also check ongoing floating volatility patterns of Instalco Intressenter and Afry AB.
Diversification Opportunities for Instalco Intressenter and Afry AB
0.91 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Instalco and Afry is 0.91. Overlapping area represents the amount of risk that can be diversified away by holding Instalco Intressenter AB and Afry AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Afry AB and Instalco Intressenter 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 Instalco Intressenter AB are associated (or correlated) with Afry AB. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Afry AB has no effect on the direction of Instalco Intressenter i.e., Instalco Intressenter and Afry AB go up and down completely randomly.
Pair Corralation between Instalco Intressenter and Afry AB
Assuming the 90 days trading horizon Instalco Intressenter AB is expected to under-perform the Afry AB. In addition to that, Instalco Intressenter is 1.37 times more volatile than Afry AB. It trades about -0.01 of its total potential returns per unit of risk. Afry AB is currently generating about 0.0 per unit of volatility. If you would invest 16,819 in Afry AB on August 26, 2024 and sell it today you would lose (1,539) from holding Afry AB or give up 9.15% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Instalco Intressenter AB vs. Afry AB
Performance |
| Timeline |
| Instalco Intressenter |
| Afry AB |
Instalco Intressenter and Afry AB Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Instalco Intressenter and Afry AB
The main advantage of trading using opposite Instalco Intressenter and Afry AB positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Instalco Intressenter position performs unexpectedly, Afry 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 Afry AB will offset losses from the drop in Afry AB's long position.| Instalco Intressenter vs. Lifco AB | Instalco Intressenter vs. Sdiptech AB | Instalco Intressenter vs. Vitec Software Group | Instalco Intressenter vs. Addtech 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 File Import module to quickly import all of your third-party portfolios from your local drive in csv format.
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