Correlation Between Lohilo Foods and Avanza Bank
Can any of the company-specific risk be diversified away by investing in both Lohilo Foods and Avanza Bank 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 Lohilo Foods and Avanza Bank into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Lohilo Foods AB and Avanza Bank Holding, you can compare the effects of market volatilities on Lohilo Foods and Avanza Bank 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 Lohilo Foods with a short position of Avanza Bank. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lohilo Foods and Avanza Bank.
Diversification Opportunities for Lohilo Foods and Avanza Bank
0.41 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Lohilo and Avanza is 0.41. Overlapping area represents the amount of risk that can be diversified away by holding Lohilo Foods AB and Avanza Bank Holding in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Avanza Bank Holding and Lohilo Foods 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 Lohilo Foods AB are associated (or correlated) with Avanza Bank. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Avanza Bank Holding has no effect on the direction of Lohilo Foods i.e., Lohilo Foods and Avanza Bank go up and down completely randomly.
Pair Corralation between Lohilo Foods and Avanza Bank
Assuming the 90 days trading horizon Lohilo Foods AB is expected to under-perform the Avanza Bank. In addition to that, Lohilo Foods is 4.65 times more volatile than Avanza Bank Holding. It trades about -0.2 of its total potential returns per unit of risk. Avanza Bank Holding is currently generating about -0.11 per unit of volatility. If you would invest 22,610 in Avanza Bank Holding on August 29, 2024 and sell it today you would lose (660.00) from holding Avanza Bank Holding or give up 2.92% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Lohilo Foods AB vs. Avanza Bank Holding
Performance |
| Timeline |
| Lohilo Foods AB |
| Avanza Bank Holding |
Lohilo Foods and Avanza Bank Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lohilo Foods and Avanza Bank
The main advantage of trading using opposite Lohilo Foods and Avanza Bank positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lohilo Foods position performs unexpectedly, Avanza Bank 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 Avanza Bank will offset losses from the drop in Avanza Bank's long position.| Lohilo Foods vs. Smart Eye AB | Lohilo Foods vs. Kamux Suomi Oy | Lohilo Foods vs. Zignsec AB | Lohilo Foods vs. Harvia Oyj |
| Avanza Bank vs. Axfood AB | Avanza Bank vs. Samhllsbyggnadsbolaget i Norden | Avanza Bank vs. Castellum AB | Avanza Bank vs. Investor AB ser |
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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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