Correlation Between Inwido AB and Peab AB
Can any of the company-specific risk be diversified away by investing in both Inwido AB and Peab AB 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 Peab AB into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Inwido AB and Peab AB, you can compare the effects of market volatilities on Inwido AB and Peab AB 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 Peab AB. Check out your portfolio center. Please also check ongoing floating volatility patterns of Inwido AB and Peab AB.
Diversification Opportunities for Inwido AB and Peab AB
Poor diversification
The 3 months correlation between Inwido and Peab is 0.73. Overlapping area represents the amount of risk that can be diversified away by holding Inwido AB and Peab AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Peab AB 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 Peab AB. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Peab AB has no effect on the direction of Inwido AB i.e., Inwido AB and Peab AB go up and down completely randomly.
Pair Corralation between Inwido AB and Peab AB
Assuming the 90 days trading horizon Inwido AB is expected to generate 0.92 times more return on investment than Peab AB. However, Inwido AB is 1.09 times less risky than Peab AB. It trades about 0.08 of its potential returns per unit of risk. Peab AB is currently generating about 0.05 per unit of risk. If you would invest 10,325 in Inwido AB on November 27, 2024 and sell it today you would earn a total of 10,395 from holding Inwido AB or generate 100.68% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Inwido AB vs. Peab AB
Performance |
| Timeline |
| Inwido AB |
| Peab AB |
Inwido AB and Peab AB Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Inwido AB and Peab AB
The main advantage of trading using opposite Inwido AB and Peab AB positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Inwido AB position performs unexpectedly, Peab AB 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 Peab AB will offset losses from the drop in Peab AB's long position.| Inwido AB vs. Lundin Mining | Inwido AB vs. Nordic Asia Investment | Inwido AB vs. Neola Medical AB | Inwido AB vs. Spago Nanomedical AB |
| Peab AB vs. G5 Entertainment publ | Peab AB vs. Catena Media plc | Peab AB vs. OptiCept Technologies AB | Peab AB vs. TF Bank 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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
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