Correlation Between Nepa AB and Anoto Group
Can any of the company-specific risk be diversified away by investing in both Nepa AB 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 Nepa AB and Anoto Group into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Nepa AB and Anoto Group AB, you can compare the effects of market volatilities on Nepa AB 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 Nepa AB with a short position of Anoto Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nepa AB and Anoto Group.
Diversification Opportunities for Nepa AB and Anoto Group
-0.19 | Correlation Coefficient |
Good diversification
The 3 months correlation between Nepa and Anoto is -0.19. Overlapping area represents the amount of risk that can be diversified away by holding Nepa 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 Nepa AB 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 Nepa 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 Nepa AB i.e., Nepa AB and Anoto Group go up and down completely randomly.
Pair Corralation between Nepa AB and Anoto Group
Assuming the 90 days trading horizon Nepa AB is expected to generate 0.21 times more return on investment than Anoto Group. However, Nepa AB is 4.69 times less risky than Anoto Group. It trades about 0.04 of its potential returns per unit of risk. Anoto Group AB is currently generating about -0.11 per unit of risk. If you would invest 2,000 in Nepa AB on December 11, 2024 and sell it today you would earn a total of 50.00 from holding Nepa AB or generate 2.5% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Nepa AB vs. Anoto Group AB
Performance |
| Timeline |
| Nepa AB |
| Anoto Group AB |
Nepa AB and Anoto Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Nepa AB and Anoto Group
The main advantage of trading using opposite Nepa AB and Anoto Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nepa AB 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.| Nepa AB vs. MAG Interactive AB | Nepa AB vs. Kambi Group PLC | Nepa AB vs. Hexatronic Group AB | Nepa AB vs. Integrum AB Series |
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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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.
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