Correlation Between Inwido AB and Scandi Standard
Can any of the company-specific risk be diversified away by investing in both Inwido AB and Scandi Standard 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 Scandi Standard into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Inwido AB and Scandi Standard publ, you can compare the effects of market volatilities on Inwido AB and Scandi Standard 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 Scandi Standard. Check out your portfolio center. Please also check ongoing floating volatility patterns of Inwido AB and Scandi Standard.
Diversification Opportunities for Inwido AB and Scandi Standard
-0.42 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Inwido and Scandi is -0.42. Overlapping area represents the amount of risk that can be diversified away by holding Inwido AB and Scandi Standard publ in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Scandi Standard publ 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 Scandi Standard. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Scandi Standard publ has no effect on the direction of Inwido AB i.e., Inwido AB and Scandi Standard go up and down completely randomly.
Pair Corralation between Inwido AB and Scandi Standard
Assuming the 90 days trading horizon Inwido AB is expected to generate 1.01 times less return on investment than Scandi Standard. In addition to that, Inwido AB is 1.28 times more volatile than Scandi Standard publ. It trades about 0.1 of its total potential returns per unit of risk. Scandi Standard publ is currently generating about 0.13 per unit of volatility. If you would invest 5,451 in Scandi Standard publ on September 3, 2024 and sell it today you would earn a total of 2,829 from holding Scandi Standard publ or generate 51.9% 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. Scandi Standard publ
Performance |
| Timeline |
| Inwido AB |
| Scandi Standard publ |
Inwido AB and Scandi Standard Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Inwido AB and Scandi Standard
The main advantage of trading using opposite Inwido AB and Scandi Standard positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Inwido AB position performs unexpectedly, Scandi Standard 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 Scandi Standard will offset losses from the drop in Scandi Standard's long position.| Inwido AB vs. Lohilo Foods AB | Inwido AB vs. FormPipe Software AB | Inwido AB vs. NetJobs Group AB | Inwido AB vs. Kinnevik Investment AB |
| Scandi Standard vs. Cloetta AB | Scandi Standard vs. Inwido AB | Scandi Standard vs. Peab AB | Scandi Standard vs. Byggmax 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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.
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