Correlation Between Nederman Holding and Rejlers AB
Can any of the company-specific risk be diversified away by investing in both Nederman Holding and Rejlers 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 Nederman Holding and Rejlers AB into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Nederman Holding AB and Rejlers AB, you can compare the effects of market volatilities on Nederman Holding and Rejlers 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 Nederman Holding with a short position of Rejlers AB. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nederman Holding and Rejlers AB.
Diversification Opportunities for Nederman Holding and Rejlers AB
-0.39 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Nederman and Rejlers is -0.39. Overlapping area represents the amount of risk that can be diversified away by holding Nederman Holding AB and Rejlers AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Rejlers AB and Nederman Holding 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 Nederman Holding AB are associated (or correlated) with Rejlers AB. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Rejlers AB has no effect on the direction of Nederman Holding i.e., Nederman Holding and Rejlers AB go up and down completely randomly.
Pair Corralation between Nederman Holding and Rejlers AB
Assuming the 90 days trading horizon Nederman Holding AB is expected to generate 2.14 times more return on investment than Rejlers AB. However, Nederman Holding is 2.14 times more volatile than Rejlers AB. It trades about -0.25 of its potential returns per unit of risk. Rejlers AB is currently generating about -0.57 per unit of risk. If you would invest 23,750 in Nederman Holding AB on August 30, 2024 and sell it today you would lose (2,750) from holding Nederman Holding AB or give up 11.58% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Nederman Holding AB vs. Rejlers AB
Performance |
| Timeline |
| Nederman Holding |
| Rejlers AB |
Nederman Holding and Rejlers AB Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Nederman Holding and Rejlers AB
The main advantage of trading using opposite Nederman Holding and Rejlers AB positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nederman Holding position performs unexpectedly, Rejlers 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 Rejlers AB will offset losses from the drop in Rejlers AB's long position.| Nederman Holding vs. Fagerhult AB | Nederman Holding vs. Lindab International AB | Nederman Holding vs. Inwido AB | Nederman Holding vs. OEM International AB |
| Rejlers AB vs. Proact IT Group | Rejlers AB vs. Nederman Holding AB | Rejlers AB vs. Sweco AB | Rejlers AB vs. Rottneros 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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.
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