Correlation Between Northbaze Group and Anoto Group
Can any of the company-specific risk be diversified away by investing in both Northbaze Group and Anoto Group 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 Northbaze Group and Anoto Group into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Northbaze Group AB and Anoto Group AB, you can compare the effects of market volatilities on Northbaze Group and Anoto Group 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 Northbaze Group with a short position of Anoto Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of Northbaze Group and Anoto Group.
Diversification Opportunities for Northbaze Group and Anoto Group
0.33 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Northbaze and Anoto is 0.33. Overlapping area represents the amount of risk that can be diversified away by holding Northbaze Group AB and Anoto Group AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Anoto Group AB and Northbaze Group 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 Northbaze Group AB are associated (or correlated) with Anoto Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Anoto Group AB has no effect on the direction of Northbaze Group i.e., Northbaze Group and Anoto Group go up and down completely randomly.
Pair Corralation between Northbaze Group and Anoto Group
Assuming the 90 days trading horizon Northbaze Group AB is expected to generate 1.54 times more return on investment than Anoto Group. However, Northbaze Group is 1.54 times more volatile than Anoto Group AB. It trades about 0.02 of its potential returns per unit of risk. Anoto Group AB is currently generating about -0.02 per unit of risk. If you would invest 40.00 in Northbaze Group AB on September 4, 2024 and sell it today you would lose (25.00) from holding Northbaze Group AB or give up 62.5% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Northbaze Group AB vs. Anoto Group AB
Performance |
| Timeline |
| Northbaze Group AB |
| Anoto Group AB |
Northbaze Group and Anoto Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Northbaze Group and Anoto Group
The main advantage of trading using opposite Northbaze Group and Anoto Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Northbaze Group position performs unexpectedly, Anoto Group 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 Anoto Group will offset losses from the drop in Anoto Group's long position.| Northbaze Group vs. Anoto Group AB | Northbaze Group vs. Bong AB | Northbaze Group vs. Episurf Medical AB | Northbaze Group vs. Eniro AB |
| Anoto Group vs. Novotek AB | Anoto Group vs. Addnode Group AB | Anoto Group vs. Softronic AB | Anoto Group vs. CTT Systems 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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.
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