Correlation Between Image Systems and Garo AB
Can any of the company-specific risk be diversified away by investing in both Image Systems and Garo 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 Image Systems and Garo AB into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Image Systems AB and Garo AB, you can compare the effects of market volatilities on Image Systems and Garo 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 Image Systems with a short position of Garo AB. Check out your portfolio center. Please also check ongoing floating volatility patterns of Image Systems and Garo AB.
Diversification Opportunities for Image Systems and Garo AB
-0.58 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Image and Garo is -0.58. Overlapping area represents the amount of risk that can be diversified away by holding Image Systems AB and Garo AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Garo AB and Image Systems 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 Image Systems AB are associated (or correlated) with Garo AB. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Garo AB has no effect on the direction of Image Systems i.e., Image Systems and Garo AB go up and down completely randomly.
Pair Corralation between Image Systems and Garo AB
Assuming the 90 days horizon Image Systems AB is expected to generate 1.19 times more return on investment than Garo AB. However, Image Systems is 1.19 times more volatile than Garo AB. It trades about 0.06 of its potential returns per unit of risk. Garo AB is currently generating about -0.07 per unit of risk. If you would invest 133.00 in Image Systems AB on September 12, 2024 and sell it today you would earn a total of 84.00 from holding Image Systems AB or generate 63.16% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Image Systems AB vs. Garo AB
Performance |
| Timeline |
| Image Systems AB |
| Garo AB |
Image Systems and Garo AB Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Image Systems and Garo AB
The main advantage of trading using opposite Image Systems and Garo AB positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Image Systems position performs unexpectedly, Garo 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 Garo AB will offset losses from the drop in Garo AB's long position.| Image Systems vs. AB SKF | Image Systems vs. Tele2 AB | Image Systems vs. Sandvik AB | Image Systems vs. Skanska AB |
| Garo AB vs. Troax Group AB | Garo AB vs. NIBE Industrier AB | Garo AB vs. Hexatronic Group AB | Garo AB vs. Bufab Holding 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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.
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