Correlation Between Nordic Asia and Inwido AB
Can any of the company-specific risk be diversified away by investing in both Nordic Asia and Inwido 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 Nordic Asia and Inwido AB into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Nordic Asia Investment and Inwido AB, you can compare the effects of market volatilities on Nordic Asia and Inwido 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 Nordic Asia with a short position of Inwido AB. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nordic Asia and Inwido AB.
Diversification Opportunities for Nordic Asia and Inwido AB
-0.35 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Nordic and Inwido is -0.35. Overlapping area represents the amount of risk that can be diversified away by holding Nordic Asia Investment and Inwido AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Inwido AB and Nordic Asia 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 Nordic Asia Investment are associated (or correlated) with Inwido AB. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Inwido AB has no effect on the direction of Nordic Asia i.e., Nordic Asia and Inwido AB go up and down completely randomly.
Pair Corralation between Nordic Asia and Inwido AB
Assuming the 90 days trading horizon Nordic Asia Investment is expected to under-perform the Inwido AB. In addition to that, Nordic Asia is 1.41 times more volatile than Inwido AB. It trades about -0.03 of its total potential returns per unit of risk. Inwido AB is currently generating about 0.07 per unit of volatility. If you would invest 10,442 in Inwido AB on September 26, 2024 and sell it today you would earn a total of 7,948 from holding Inwido AB or generate 76.12% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Nordic Asia Investment vs. Inwido AB
Performance |
| Timeline |
| Nordic Asia Investment |
| Inwido AB |
Nordic Asia and Inwido AB Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Nordic Asia and Inwido AB
The main advantage of trading using opposite Nordic Asia and Inwido AB positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nordic Asia position performs unexpectedly, Inwido 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 Inwido AB will offset losses from the drop in Inwido AB's long position.| Nordic Asia vs. Kinnevik Investment AB | Nordic Asia vs. Samhllsbyggnadsbolaget i Norden | Nordic Asia vs. Swedbank AB |
| Inwido AB vs. Skandinaviska Enskilda Banken | Inwido AB vs. Redsense Medical AB | Inwido AB vs. Soder Sportfiske AB | Inwido AB vs. Neola Medical 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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.
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