Correlation Between NOTE AB and Garo AB
Can any of the company-specific risk be diversified away by investing in both NOTE AB and Garo 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 NOTE AB and Garo AB into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between NOTE AB and Garo AB, you can compare the effects of market volatilities on NOTE AB and Garo 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 NOTE AB with a short position of Garo AB. Check out your portfolio center. Please also check ongoing floating volatility patterns of NOTE AB and Garo AB.
Diversification Opportunities for NOTE AB and Garo AB
Very good diversification
The 3 months correlation between NOTE and Garo is -0.32. Overlapping area represents the amount of risk that can be diversified away by holding NOTE AB and Garo AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Garo AB and NOTE 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 NOTE AB are associated (or correlated) with Garo AB. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Garo AB has no effect on the direction of NOTE AB i.e., NOTE AB and Garo AB go up and down completely randomly.
Pair Corralation between NOTE AB and Garo AB
Assuming the 90 days trading horizon NOTE AB is expected to generate 0.98 times more return on investment than Garo AB. However, NOTE AB is 1.03 times less risky than Garo AB. It trades about -0.03 of its potential returns per unit of risk. Garo AB is currently generating about -0.11 per unit of risk. If you would invest 14,850 in NOTE AB on September 1, 2024 and sell it today you would lose (1,950) from holding NOTE AB or give up 13.13% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
NOTE AB vs. Garo AB
Performance |
| Timeline |
| NOTE AB |
| Garo AB |
NOTE AB and Garo AB Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with NOTE AB and Garo AB
The main advantage of trading using opposite NOTE AB and Garo AB positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NOTE AB position performs unexpectedly, Garo 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 Garo AB will offset losses from the drop in Garo AB's long position.| NOTE AB vs. New Nordic Healthbrands | NOTE AB vs. Episurf Medical AB | NOTE AB vs. Filo Mining Corp | NOTE AB vs. JLT Mobile Computers |
| Garo AB vs. Troax Group AB | Garo AB vs. NIBE Industrier AB | Garo AB vs. Hexatronic Group AB | Garo AB vs. Bufab Holding 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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..
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