Correlation Between NOTE AB and Hanza AB
Can any of the company-specific risk be diversified away by investing in both NOTE AB and Hanza 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 Hanza 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 Hanza AB, you can compare the effects of market volatilities on NOTE AB and Hanza 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 Hanza AB. Check out your portfolio center. Please also check ongoing floating volatility patterns of NOTE AB and Hanza AB.
Diversification Opportunities for NOTE AB and Hanza AB
Poor diversification
The 3 months correlation between NOTE and Hanza is 0.78. Overlapping area represents the amount of risk that can be diversified away by holding NOTE AB and Hanza AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hanza 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 Hanza AB. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hanza AB has no effect on the direction of NOTE AB i.e., NOTE AB and Hanza AB go up and down completely randomly.
Pair Corralation between NOTE AB and Hanza AB
Assuming the 90 days trading horizon NOTE AB is expected to generate 136.26 times less return on investment than Hanza AB. But when comparing it to its historical volatility, NOTE AB is 2.43 times less risky than Hanza AB. It trades about 0.0 of its potential returns per unit of risk. Hanza AB is currently generating about 0.19 of returns per unit of risk over similar time horizon. If you would invest 5,880 in Hanza AB on August 26, 2024 and sell it today you would earn a total of 925.00 from holding Hanza AB or generate 15.73% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
NOTE AB vs. Hanza AB
Performance |
| Timeline |
| NOTE AB |
| Hanza AB |
NOTE AB and Hanza AB Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with NOTE AB and Hanza AB
The main advantage of trading using opposite NOTE AB and Hanza AB positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NOTE AB position performs unexpectedly, Hanza 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 Hanza AB will offset losses from the drop in Hanza AB's long position.| NOTE AB vs. Novotek AB | NOTE AB vs. Addnode Group AB | NOTE AB vs. Softronic AB | NOTE AB vs. CTT Systems AB |
| Hanza AB vs. Hexatronic Group AB | Hanza AB vs. Instalco Intressenter AB | Hanza AB vs. NOTE AB | Hanza AB vs. Dometic Group 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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.
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