Correlation Between Nepa AB and Avensia Publ
Can any of the company-specific risk be diversified away by investing in both Nepa AB and Avensia Publ 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 Avensia Publ into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Nepa AB and Avensia publ AB, you can compare the effects of market volatilities on Nepa AB and Avensia Publ 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 Avensia Publ. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nepa AB and Avensia Publ.
Diversification Opportunities for Nepa AB and Avensia Publ
0.49 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Nepa and Avensia is 0.49. Overlapping area represents the amount of risk that can be diversified away by holding Nepa AB and Avensia publ AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Avensia publ 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 Avensia Publ. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Avensia publ AB has no effect on the direction of Nepa AB i.e., Nepa AB and Avensia Publ go up and down completely randomly.
Pair Corralation between Nepa AB and Avensia Publ
Assuming the 90 days trading horizon Nepa AB is expected to generate 0.79 times more return on investment than Avensia Publ. However, Nepa AB is 1.27 times less risky than Avensia Publ. It trades about 0.34 of its potential returns per unit of risk. Avensia publ AB is currently generating about -0.13 per unit of risk. If you would invest 1,770 in Nepa AB on August 29, 2024 and sell it today you would earn a total of 205.00 from holding Nepa AB or generate 11.58% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Nepa AB vs. Avensia publ AB
Performance |
| Timeline |
| Nepa AB |
| Avensia publ AB |
Nepa AB and Avensia Publ Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Nepa AB and Avensia Publ
The main advantage of trading using opposite Nepa AB and Avensia Publ positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nepa AB position performs unexpectedly, Avensia Publ 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 Avensia Publ will offset losses from the drop in Avensia Publ'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 |
| Avensia Publ vs. Svedbergs i Dalstorp | Avensia Publ vs. Know IT AB | Avensia Publ vs. FormPipe Software 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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
Other Complementary Tools
| Headlines Timeline Stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity | |
| Alpha Finder Use alpha and beta coefficients to find investment opportunities after accounting for the risk | |
| Premium Stories Follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope | |
| Idea Breakdown Analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes | |
| Correlation Analysis Reduce portfolio risk simply by holding instruments which are not perfectly correlated |