Correlation Between Investor and Investor
Can any of the company-specific risk be diversified away by investing in both Investor and Investor 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 Investor 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 Investor AB ser, you can compare the effects of market volatilities on Investor and Investor 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 Investor. Check out your portfolio center. Please also check ongoing floating volatility patterns of Investor and Investor.
Diversification Opportunities for Investor and Investor
No risk reduction
The 3 months correlation between Investor and Investor is 0.99. Overlapping area represents the amount of risk that can be diversified away by holding Investor AB ser and Investor AB ser in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Investor AB ser 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 Investor. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Investor AB ser has no effect on the direction of Investor i.e., Investor and Investor go up and down completely randomly.
Pair Corralation between Investor and Investor
Assuming the 90 days trading horizon Investor AB ser is expected to under-perform the Investor. But the stock apears to be less risky and, when comparing its historical volatility, Investor AB ser is 1.07 times less risky than Investor. The stock trades about -0.24 of its potential returns per unit of risk. The Investor AB ser is currently generating about -0.19 of returns per unit of risk over similar time horizon. If you would invest 30,794 in Investor AB ser on August 29, 2024 and sell it today you would lose (1,129) from holding Investor AB ser or give up 3.67% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Investor AB ser vs. Investor AB ser
Performance |
| Timeline |
| Investor AB ser |
| Investor AB ser |
Investor and Investor Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Investor and Investor
The main advantage of trading using opposite Investor and Investor positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Investor position performs unexpectedly, Investor 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 Investor will offset losses from the drop in Investor's long position.| Investor vs. Norva24 Group AB | Investor vs. KABE Group AB | Investor vs. IAR Systems Group | Investor vs. Clinical Laserthermia Systems |
| Investor vs. Kinnevik Investment AB | Investor vs. Investment AB Latour | Investor vs. Samhllsbyggnadsbolaget i Norden | Investor vs. Industrivarden AB ser |
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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.
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