Correlation Between NetJobs Group and Sandvik AB
Can any of the company-specific risk be diversified away by investing in both NetJobs Group and Sandvik 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 NetJobs Group and Sandvik AB into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between NetJobs Group AB and Sandvik AB, you can compare the effects of market volatilities on NetJobs Group and Sandvik 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 NetJobs Group with a short position of Sandvik AB. Check out your portfolio center. Please also check ongoing floating volatility patterns of NetJobs Group and Sandvik AB.
Diversification Opportunities for NetJobs Group and Sandvik AB
0.03 | Correlation Coefficient |
Significant diversification
The 3 months correlation between NetJobs and Sandvik is 0.03. Overlapping area represents the amount of risk that can be diversified away by holding NetJobs Group AB and Sandvik AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sandvik AB and NetJobs 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 NetJobs Group AB are associated (or correlated) with Sandvik AB. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sandvik AB has no effect on the direction of NetJobs Group i.e., NetJobs Group and Sandvik AB go up and down completely randomly.
Pair Corralation between NetJobs Group and Sandvik AB
Assuming the 90 days trading horizon NetJobs Group AB is expected to generate 2.5 times more return on investment than Sandvik AB. However, NetJobs Group is 2.5 times more volatile than Sandvik AB. It trades about 0.05 of its potential returns per unit of risk. Sandvik AB is currently generating about -0.12 per unit of risk. If you would invest 35.00 in NetJobs Group AB on September 3, 2024 and sell it today you would earn a total of 1.00 from holding NetJobs Group AB or generate 2.86% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
NetJobs Group AB vs. Sandvik AB
Performance |
| Timeline |
| NetJobs Group AB |
| Sandvik AB |
NetJobs Group and Sandvik AB Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with NetJobs Group and Sandvik AB
The main advantage of trading using opposite NetJobs Group and Sandvik AB positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NetJobs Group position performs unexpectedly, Sandvik 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 Sandvik AB will offset losses from the drop in Sandvik AB's long position.| NetJobs Group vs. Sandvik AB | NetJobs Group vs. AB SKF | NetJobs Group vs. ASSA ABLOY AB | NetJobs Group vs. Atlas Copco AB |
| Sandvik AB vs. AB SKF | Sandvik AB vs. ASSA ABLOY AB | Sandvik AB vs. Atlas Copco AB | Sandvik AB vs. Boliden 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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.
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