Correlation Between Nolato AB and Inwido AB
Can any of the company-specific risk be diversified away by investing in both Nolato AB and Inwido 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 Nolato AB and Inwido AB into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Nolato AB and Inwido AB, you can compare the effects of market volatilities on Nolato AB and Inwido 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 Nolato AB with a short position of Inwido AB. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nolato AB and Inwido AB.
Diversification Opportunities for Nolato AB and Inwido AB
Poor diversification
The 3 months correlation between Nolato and Inwido is 0.63. Overlapping area represents the amount of risk that can be diversified away by holding Nolato AB and Inwido AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Inwido AB and Nolato 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 Nolato AB are associated (or correlated) with Inwido AB. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Inwido AB has no effect on the direction of Nolato AB i.e., Nolato AB and Inwido AB go up and down completely randomly.
Pair Corralation between Nolato AB and Inwido AB
Assuming the 90 days trading horizon Nolato AB is expected to generate 1.34 times more return on investment than Inwido AB. However, Nolato AB is 1.34 times more volatile than Inwido AB. It trades about -0.15 of its potential returns per unit of risk. Inwido AB is currently generating about -0.24 per unit of risk. If you would invest 5,675 in Nolato AB on September 2, 2024 and sell it today you would lose (280.00) from holding Nolato AB or give up 4.93% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Nolato AB vs. Inwido AB
Performance |
| Timeline |
| Nolato AB |
| Inwido AB |
Nolato AB and Inwido AB Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Nolato AB and Inwido AB
The main advantage of trading using opposite Nolato AB and Inwido AB positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nolato AB position performs unexpectedly, Inwido 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 Inwido AB will offset losses from the drop in Inwido AB's long position.| Nolato AB vs. SaltX Technology Holding | Nolato AB vs. Acconeer AB | Nolato AB vs. GomSpace Group AB | Nolato AB vs. KABE Group AB |
| Inwido AB vs. Samhllsbyggnadsbolaget i Norden | Inwido AB vs. Sinch AB | Inwido AB vs. Embracer Group AB | Inwido AB vs. Evolution 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 Stocks Directory module to find actively traded stocks across global markets.
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