Correlation Between Investor and Idun Industrier
Can any of the company-specific risk be diversified away by investing in both Investor and Idun Industrier 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 Investor and Idun Industrier into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Investor AB ser and Idun Industrier AB, you can compare the effects of market volatilities on Investor and Idun Industrier 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 Investor with a short position of Idun Industrier. Check out your portfolio center. Please also check ongoing floating volatility patterns of Investor and Idun Industrier.
Diversification Opportunities for Investor and Idun Industrier
-0.67 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Investor and Idun is -0.67. Overlapping area represents the amount of risk that can be diversified away by holding Investor AB ser and Idun Industrier AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Idun Industrier AB and Investor 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 Investor AB ser are associated (or correlated) with Idun Industrier. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Idun Industrier AB has no effect on the direction of Investor i.e., Investor and Idun Industrier go up and down completely randomly.
Pair Corralation between Investor and Idun Industrier
Assuming the 90 days trading horizon Investor AB ser is expected to generate 0.42 times more return on investment than Idun Industrier. However, Investor AB ser is 2.38 times less risky than Idun Industrier. It trades about 0.09 of its potential returns per unit of risk. Idun Industrier AB is currently generating about 0.03 per unit of risk. If you would invest 20,116 in Investor AB ser on September 1, 2024 and sell it today you would earn a total of 9,614 from holding Investor AB ser or generate 47.79% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 99.78% |
| Values | Daily Returns |
Investor AB ser vs. Idun Industrier AB
Performance |
| Timeline |
| Investor AB ser |
| Idun Industrier AB |
Investor and Idun Industrier Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Investor and Idun Industrier
The main advantage of trading using opposite Investor and Idun Industrier positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Investor position performs unexpectedly, Idun Industrier 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 Idun Industrier will offset losses from the drop in Idun Industrier's long position.| Investor vs. Investor AB ser | Investor vs. Industrivarden AB ser | Investor vs. Investment AB Latour | Investor vs. Kinnevik Investment AB |
| Idun Industrier vs. AstraZeneca PLC | Idun Industrier vs. Investor AB ser | Idun Industrier vs. Investor AB ser | Idun Industrier vs. Atlas Copco 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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.
Other Complementary Tools
| Latest Portfolios Quick portfolio dashboard that showcases your latest portfolios | |
| Portfolio File Import Quickly import all of your third-party portfolios from your local drive in csv format | |
| Theme Ratings Determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| FinTech Suite Use AI to screen and filter profitable investment opportunities | |
| Portfolio Center All portfolio management and optimization tools to improve performance of your portfolios |