Correlation Between Instalco Intressenter and Ferronordic
Can any of the company-specific risk be diversified away by investing in both Instalco Intressenter 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 Instalco Intressenter and Ferronordic 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 Ferronordic AB, you can compare the effects of market volatilities on Instalco Intressenter 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 Instalco Intressenter with a short position of Ferronordic. Check out your portfolio center. Please also check ongoing floating volatility patterns of Instalco Intressenter and Ferronordic.
Diversification Opportunities for Instalco Intressenter and Ferronordic
0.7 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Instalco and Ferronordic is 0.7. Overlapping area represents the amount of risk that can be diversified away by holding Instalco Intressenter AB and Ferronordic AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ferronordic 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 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 Instalco Intressenter i.e., Instalco Intressenter and Ferronordic go up and down completely randomly.
Pair Corralation between Instalco Intressenter and Ferronordic
Assuming the 90 days trading horizon Instalco Intressenter AB is expected to under-perform the Ferronordic. But the stock apears to be less risky and, when comparing its historical volatility, Instalco Intressenter AB is 1.26 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 0.02 of returns per unit of risk over similar time horizon. If you would invest 5,088 in Ferronordic AB on September 3, 2024 and sell it today you would earn a total of 732.00 from holding Ferronordic AB or generate 14.39% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Instalco Intressenter AB vs. Ferronordic AB
Performance |
| Timeline |
| Instalco Intressenter |
| Ferronordic AB |
Instalco Intressenter and Ferronordic Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Instalco Intressenter and Ferronordic
The main advantage of trading using opposite Instalco Intressenter and Ferronordic positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Instalco Intressenter 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.| Instalco Intressenter vs. Lifco AB | Instalco Intressenter vs. Sdiptech AB | Instalco Intressenter vs. Vitec Software Group | Instalco Intressenter vs. Addtech AB |
| Ferronordic vs. TradeDoubler AB | Ferronordic vs. 24SevenOffice Scandinavia AB | Ferronordic vs. Kinnevik Investment AB | Ferronordic vs. Lundin Mining |
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 Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
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