Correlation Between Norva24 Group and Alimak Hek
Can any of the company-specific risk be diversified away by investing in both Norva24 Group and Alimak Hek 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 Norva24 Group and Alimak Hek into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Norva24 Group AB and Alimak Hek Group, you can compare the effects of market volatilities on Norva24 Group and Alimak Hek 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 Norva24 Group with a short position of Alimak Hek. Check out your portfolio center. Please also check ongoing floating volatility patterns of Norva24 Group and Alimak Hek.
Diversification Opportunities for Norva24 Group and Alimak Hek
-0.35 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Norva24 and Alimak is -0.35. Overlapping area represents the amount of risk that can be diversified away by holding Norva24 Group AB and Alimak Hek Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Alimak Hek Group and Norva24 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 Norva24 Group AB are associated (or correlated) with Alimak Hek. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Alimak Hek Group has no effect on the direction of Norva24 Group i.e., Norva24 Group and Alimak Hek go up and down completely randomly.
Pair Corralation between Norva24 Group and Alimak Hek
Assuming the 90 days trading horizon Norva24 Group AB is expected to under-perform the Alimak Hek. In addition to that, Norva24 Group is 1.94 times more volatile than Alimak Hek Group. It trades about -0.13 of its total potential returns per unit of risk. Alimak Hek Group is currently generating about -0.07 per unit of volatility. If you would invest 12,220 in Alimak Hek Group on September 1, 2024 and sell it today you would lose (280.00) from holding Alimak Hek Group or give up 2.29% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Norva24 Group AB vs. Alimak Hek Group
Performance |
| Timeline |
| Norva24 Group AB |
| Alimak Hek Group |
Norva24 Group and Alimak Hek Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Norva24 Group and Alimak Hek
The main advantage of trading using opposite Norva24 Group and Alimak Hek positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Norva24 Group position performs unexpectedly, Alimak Hek 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 Alimak Hek will offset losses from the drop in Alimak Hek's long position.| Norva24 Group vs. Minesto AB | Norva24 Group vs. Sivers IMA Holding | Norva24 Group vs. SolTech Energy Sweden | Norva24 Group vs. AAC Clyde Space |
| Alimak Hek vs. Samhllsbyggnadsbolaget i Norden | Alimak Hek vs. Sinch AB | Alimak Hek vs. Embracer Group AB | Alimak Hek 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 Transaction History module to view history of all your transactions and understand their impact on performance.
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