Correlation Between Maven Wireless and Invisio Communications
Can any of the company-specific risk be diversified away by investing in both Maven Wireless and Invisio Communications 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 Maven Wireless and Invisio Communications into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Maven Wireless Sweden and Invisio Communications AB, you can compare the effects of market volatilities on Maven Wireless and Invisio Communications 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 Maven Wireless with a short position of Invisio Communications. Check out your portfolio center. Please also check ongoing floating volatility patterns of Maven Wireless and Invisio Communications.
Diversification Opportunities for Maven Wireless and Invisio Communications
-0.46 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Maven and Invisio is -0.46. Overlapping area represents the amount of risk that can be diversified away by holding Maven Wireless Sweden and Invisio Communications AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Invisio Communications and Maven Wireless 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 Maven Wireless Sweden are associated (or correlated) with Invisio Communications. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Invisio Communications has no effect on the direction of Maven Wireless i.e., Maven Wireless and Invisio Communications go up and down completely randomly.
Pair Corralation between Maven Wireless and Invisio Communications
Assuming the 90 days trading horizon Maven Wireless Sweden is expected to under-perform the Invisio Communications. In addition to that, Maven Wireless is 1.57 times more volatile than Invisio Communications AB. It trades about -0.11 of its total potential returns per unit of risk. Invisio Communications AB is currently generating about 0.03 per unit of volatility. If you would invest 26,450 in Invisio Communications AB on September 1, 2024 and sell it today you would earn a total of 1,750 from holding Invisio Communications AB or generate 6.62% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Maven Wireless Sweden vs. Invisio Communications AB
Performance |
| Timeline |
| Maven Wireless Sweden |
| Invisio Communications |
Maven Wireless and Invisio Communications Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Maven Wireless and Invisio Communications
The main advantage of trading using opposite Maven Wireless and Invisio Communications positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Maven Wireless position performs unexpectedly, Invisio Communications 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 Invisio Communications will offset losses from the drop in Invisio Communications' long position.| Maven Wireless vs. Checkin Group AB | Maven Wireless vs. Midsummer AB | Maven Wireless vs. Hexatronic Group AB | Maven Wireless vs. Cint Group AB |
| Invisio Communications vs. Samhllsbyggnadsbolaget i Norden | Invisio Communications vs. Sinch AB | Invisio Communications vs. Embracer Group AB | Invisio Communications vs. Evolution 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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.
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