Correlation Between NAXS Nordic and Industrivarden
Can any of the company-specific risk be diversified away by investing in both NAXS Nordic and Industrivarden 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 NAXS Nordic and Industrivarden into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between NAXS Nordic Access and Industrivarden AB ser, you can compare the effects of market volatilities on NAXS Nordic and Industrivarden 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 NAXS Nordic with a short position of Industrivarden. Check out your portfolio center. Please also check ongoing floating volatility patterns of NAXS Nordic and Industrivarden.
Diversification Opportunities for NAXS Nordic and Industrivarden
0.54 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between NAXS and Industrivarden is 0.54. Overlapping area represents the amount of risk that can be diversified away by holding NAXS Nordic Access and Industrivarden AB ser in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Industrivarden AB ser and NAXS Nordic 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 NAXS Nordic Access are associated (or correlated) with Industrivarden. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Industrivarden AB ser has no effect on the direction of NAXS Nordic i.e., NAXS Nordic and Industrivarden go up and down completely randomly.
Pair Corralation between NAXS Nordic and Industrivarden
Assuming the 90 days trading horizon NAXS Nordic Access is expected to under-perform the Industrivarden. In addition to that, NAXS Nordic is 1.33 times more volatile than Industrivarden AB ser. It trades about -0.01 of its total potential returns per unit of risk. Industrivarden AB ser is currently generating about 0.08 per unit of volatility. If you would invest 27,171 in Industrivarden AB ser on November 2, 2024 and sell it today you would earn a total of 12,229 from holding Industrivarden AB ser or generate 45.01% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
NAXS Nordic Access vs. Industrivarden AB ser
Performance |
| Timeline |
| NAXS Nordic Access |
| Industrivarden AB ser |
NAXS Nordic and Industrivarden Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with NAXS Nordic and Industrivarden
The main advantage of trading using opposite NAXS Nordic and Industrivarden positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NAXS Nordic position performs unexpectedly, Industrivarden 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 Industrivarden will offset losses from the drop in Industrivarden's long position.| NAXS Nordic vs. AB Traction | NAXS Nordic vs. Havsfrun Investment AB | NAXS Nordic vs. Novotek AB | NAXS Nordic vs. Investment AB Oresund |
| Industrivarden vs. Investor AB ser | Industrivarden vs. L E Lundbergfretagen | Industrivarden vs. Kinnevik Investment AB | Industrivarden 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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.
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