Correlation Between Logistea A and Alleima AB
Can any of the company-specific risk be diversified away by investing in both Logistea A and Alleima 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 Logistea A and Alleima AB into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Logistea A and Alleima AB, you can compare the effects of market volatilities on Logistea A and Alleima 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 Logistea A with a short position of Alleima AB. Check out your portfolio center. Please also check ongoing floating volatility patterns of Logistea A and Alleima AB.
Diversification Opportunities for Logistea A and Alleima AB
-0.64 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Logistea and Alleima is -0.64. Overlapping area represents the amount of risk that can be diversified away by holding Logistea A and Alleima AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Alleima AB and Logistea A 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 Logistea A are associated (or correlated) with Alleima AB. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Alleima AB has no effect on the direction of Logistea A i.e., Logistea A and Alleima AB go up and down completely randomly.
Pair Corralation between Logistea A and Alleima AB
Assuming the 90 days trading horizon Logistea A is expected to generate 11.69 times less return on investment than Alleima AB. In addition to that, Logistea A is 1.05 times more volatile than Alleima AB. It trades about 0.02 of its total potential returns per unit of risk. Alleima AB is currently generating about 0.22 per unit of volatility. If you would invest 7,235 in Alleima AB on October 26, 2024 and sell it today you would earn a total of 1,105 from holding Alleima AB or generate 15.27% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Logistea A vs. Alleima AB
Performance |
| Timeline |
| Logistea A |
| Alleima AB |
Logistea A and Alleima AB Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Logistea A and Alleima AB
The main advantage of trading using opposite Logistea A and Alleima AB positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Logistea A position performs unexpectedly, Alleima 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 Alleima AB will offset losses from the drop in Alleima AB's long position.| Logistea A vs. Logistea AB Series | Logistea A vs. Corem Property Group | Logistea A vs. NP3 Fastigheter AB | Logistea A vs. NCAB Group |
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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 Bonds Directory module to find actively traded corporate debentures issued by US companies.
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