Correlation Between Investment and Storskogen Group
Can any of the company-specific risk be diversified away by investing in both Investment and Storskogen Group 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 Investment and Storskogen Group into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Investment AB Latour and Storskogen Group AB, you can compare the effects of market volatilities on Investment and Storskogen Group 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 Investment with a short position of Storskogen Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of Investment and Storskogen Group.
Diversification Opportunities for Investment and Storskogen Group
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Investment and Storskogen is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Investment AB Latour and Storskogen Group AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Storskogen Group and Investment 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 Investment AB Latour are associated (or correlated) with Storskogen Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Storskogen Group has no effect on the direction of Investment i.e., Investment and Storskogen Group go up and down completely randomly.
Pair Corralation between Investment and Storskogen Group
Assuming the 90 days trading horizon Investment AB Latour is expected to under-perform the Storskogen Group. But the stock apears to be less risky and, when comparing its historical volatility, Investment AB Latour is 2.3 times less risky than Storskogen Group. The stock trades about -0.14 of its potential returns per unit of risk. The Storskogen Group AB is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 1,007 in Storskogen Group AB on September 3, 2024 and sell it today you would earn a total of 121.00 from holding Storskogen Group AB or generate 12.02% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Investment AB Latour vs. Storskogen Group AB
Performance |
| Timeline |
| Investment AB Latour |
| Storskogen Group |
Investment and Storskogen Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Investment and Storskogen Group
The main advantage of trading using opposite Investment and Storskogen Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Investment position performs unexpectedly, Storskogen Group 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 Storskogen Group will offset losses from the drop in Storskogen Group's long position.| Investment vs. Kinnevik Investment AB | Investment vs. Investor AB ser | Investment vs. L E Lundbergfretagen | Investment vs. Industrivarden AB ser |
| Storskogen Group vs. L E Lundbergfretagen | Storskogen Group vs. Industrivarden AB ser | Storskogen Group vs. Svenska Handelsbanken AB | Storskogen Group vs. Investment AB Latour |
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 Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
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