Correlation Between Inwido AB and Nordic Paper
Can any of the company-specific risk be diversified away by investing in both Inwido AB and Nordic 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 Nordic 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 Nordic Paper Holding, you can compare the effects of market volatilities on Inwido AB and Nordic 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 Nordic Paper. Check out your portfolio center. Please also check ongoing floating volatility patterns of Inwido AB and Nordic Paper.
Diversification Opportunities for Inwido AB and Nordic Paper
-0.26 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Inwido and Nordic is -0.26. Overlapping area represents the amount of risk that can be diversified away by holding Inwido AB and Nordic Paper Holding in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nordic Paper Holding 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 Nordic Paper. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nordic Paper Holding has no effect on the direction of Inwido AB i.e., Inwido AB and Nordic Paper go up and down completely randomly.
Pair Corralation between Inwido AB and Nordic Paper
Assuming the 90 days trading horizon Inwido AB is expected to generate 1.09 times more return on investment than Nordic Paper. However, Inwido AB is 1.09 times more volatile than Nordic Paper Holding. It trades about 0.08 of its potential returns per unit of risk. Nordic Paper Holding is currently generating about 0.07 per unit of risk. If you would invest 9,383 in Inwido AB on September 4, 2024 and sell it today you would earn a total of 9,017 from holding Inwido AB or generate 96.1% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Inwido AB vs. Nordic Paper Holding
Performance |
| Timeline |
| Inwido AB |
| Nordic Paper Holding |
Inwido AB and Nordic Paper Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Inwido AB and Nordic Paper
The main advantage of trading using opposite Inwido AB and Nordic Paper positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Inwido AB position performs unexpectedly, Nordic 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 Nordic Paper will offset losses from the drop in Nordic Paper's long position.| Inwido AB vs. Upsales Technology AB | Inwido AB vs. Swedbank AB | Inwido AB vs. Beowulf Mining PLC | Inwido AB vs. Axfood AB |
| Nordic Paper vs. Rottneros AB | Nordic Paper vs. G5 Entertainment publ | Nordic Paper vs. SSAB AB | Nordic Paper vs. Inwido 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 Money Managers module to screen money managers from public funds and ETFs managed around the world.
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