Correlation Between Invisio Communications and Inwido AB
Can any of the company-specific risk be diversified away by investing in both Invisio Communications and Inwido 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 Invisio Communications and Inwido AB into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Invisio Communications AB and Inwido AB, you can compare the effects of market volatilities on Invisio Communications and Inwido 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 Invisio Communications with a short position of Inwido AB. Check out your portfolio center. Please also check ongoing floating volatility patterns of Invisio Communications and Inwido AB.
Diversification Opportunities for Invisio Communications and Inwido AB
0.42 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Invisio and Inwido is 0.42. Overlapping area represents the amount of risk that can be diversified away by holding Invisio Communications AB and Inwido AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Inwido AB and Invisio Communications 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 Invisio Communications AB are associated (or correlated) with Inwido AB. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Inwido AB has no effect on the direction of Invisio Communications i.e., Invisio Communications and Inwido AB go up and down completely randomly.
Pair Corralation between Invisio Communications and Inwido AB
Assuming the 90 days trading horizon Invisio Communications AB is expected to generate 1.36 times more return on investment than Inwido AB. However, Invisio Communications is 1.36 times more volatile than Inwido AB. It trades about -0.02 of its potential returns per unit of risk. Inwido AB is currently generating about -0.27 per unit of risk. If you would invest 27,350 in Invisio Communications AB on October 15, 2024 and sell it today you would lose (150.00) from holding Invisio Communications AB or give up 0.55% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Invisio Communications AB vs. Inwido AB
Performance |
| Timeline |
| Invisio Communications |
| Inwido AB |
Invisio Communications and Inwido AB Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Invisio Communications and Inwido AB
The main advantage of trading using opposite Invisio Communications and Inwido AB positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Invisio Communications position performs unexpectedly, Inwido 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 Inwido AB will offset losses from the drop in Inwido AB's long position.| Invisio Communications vs. Hexatronic Group AB | Invisio Communications vs. CellaVision AB | Invisio Communications vs. Xvivo Perfusion AB | Invisio Communications vs. Sectra AB |
| Inwido AB vs. Nitro Games Oyj | Inwido AB vs. Spago Nanomedical AB | Inwido AB vs. Nexam Chemical Holding | Inwido AB vs. Havsfrun Investment 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 Portfolio Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.
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