Correlation Between Inwido AB and Arctic Paper
Can any of the company-specific risk be diversified away by investing in both Inwido AB and Arctic Paper 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 Inwido AB and Arctic Paper into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Inwido AB and Arctic Paper SA, you can compare the effects of market volatilities on Inwido AB and Arctic Paper 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 Inwido AB with a short position of Arctic Paper. Check out your portfolio center. Please also check ongoing floating volatility patterns of Inwido AB and Arctic Paper.
Diversification Opportunities for Inwido AB and Arctic Paper
-0.57 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Inwido and Arctic is -0.57. Overlapping area represents the amount of risk that can be diversified away by holding Inwido AB and Arctic Paper SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Arctic Paper SA and Inwido AB 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 Inwido AB are associated (or correlated) with Arctic Paper. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Arctic Paper SA has no effect on the direction of Inwido AB i.e., Inwido AB and Arctic Paper go up and down completely randomly.
Pair Corralation between Inwido AB and Arctic Paper
Assuming the 90 days trading horizon Inwido AB is expected to generate 0.91 times more return on investment than Arctic Paper. However, Inwido AB is 1.1 times less risky than Arctic Paper. It trades about 0.02 of its potential returns per unit of risk. Arctic Paper SA is currently generating about -0.18 per unit of risk. If you would invest 18,070 in Inwido AB on August 31, 2024 and sell it today you would earn a total of 230.00 from holding Inwido AB or generate 1.27% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Inwido AB vs. Arctic Paper SA
Performance |
| Timeline |
| Inwido AB |
| Arctic Paper SA |
Inwido AB and Arctic Paper Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Inwido AB and Arctic Paper
The main advantage of trading using opposite Inwido AB and Arctic Paper positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Inwido AB position performs unexpectedly, Arctic Paper 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 Arctic Paper will offset losses from the drop in Arctic Paper's long position.| Inwido AB vs. Scandinavian ChemoTech AB | Inwido AB vs. Addtech AB | Inwido AB vs. Sdiptech AB | Inwido AB vs. G5 Entertainment publ |
| Arctic Paper vs. Arion banki hf | Arctic Paper vs. AcadeMedia AB | Arctic Paper vs. Norion Bank | Arctic Paper vs. SaveLend Group 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 Transaction History module to view history of all your transactions and understand their impact on performance.
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