Correlation Between K2A Knaust and AVTECH Sweden
Can any of the company-specific risk be diversified away by investing in both K2A Knaust and AVTECH Sweden 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 K2A Knaust and AVTECH Sweden into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between K2A Knaust Andersson and AVTECH Sweden AB, you can compare the effects of market volatilities on K2A Knaust and AVTECH Sweden 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 K2A Knaust with a short position of AVTECH Sweden. Check out your portfolio center. Please also check ongoing floating volatility patterns of K2A Knaust and AVTECH Sweden.
Diversification Opportunities for K2A Knaust and AVTECH Sweden
0.24 | Correlation Coefficient |
Modest diversification
The 3 months correlation between K2A and AVTECH is 0.24. Overlapping area represents the amount of risk that can be diversified away by holding K2A Knaust Andersson and AVTECH Sweden AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AVTECH Sweden AB and K2A Knaust 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 K2A Knaust Andersson are associated (or correlated) with AVTECH Sweden. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AVTECH Sweden AB has no effect on the direction of K2A Knaust i.e., K2A Knaust and AVTECH Sweden go up and down completely randomly.
Pair Corralation between K2A Knaust and AVTECH Sweden
Assuming the 90 days trading horizon K2A Knaust Andersson is expected to under-perform the AVTECH Sweden. But the stock apears to be less risky and, when comparing its historical volatility, K2A Knaust Andersson is 1.3 times less risky than AVTECH Sweden. The stock trades about -0.34 of its potential returns per unit of risk. The AVTECH Sweden AB is currently generating about -0.15 of returns per unit of risk over similar time horizon. If you would invest 448.00 in AVTECH Sweden AB on September 2, 2024 and sell it today you would lose (53.00) from holding AVTECH Sweden AB or give up 11.83% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
K2A Knaust Andersson vs. AVTECH Sweden AB
Performance |
| Timeline |
| K2A Knaust Andersson |
| AVTECH Sweden AB |
K2A Knaust and AVTECH Sweden Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with K2A Knaust and AVTECH Sweden
The main advantage of trading using opposite K2A Knaust and AVTECH Sweden positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if K2A Knaust position performs unexpectedly, AVTECH Sweden 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 AVTECH Sweden will offset losses from the drop in AVTECH Sweden's long position.| K2A Knaust vs. K Fast Holding AB | K2A Knaust vs. Nyfosa AB | K2A Knaust vs. Fastighets AB Balder | K2A Knaust vs. Catena AB |
| AVTECH Sweden vs. AroCell AB | AVTECH Sweden vs. aXichem AB | AVTECH Sweden vs. Gaming Corps AB | AVTECH Sweden vs. Alelion Energy Systems |
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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.
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