Correlation Between Novina SA and Amica SA
Can any of the company-specific risk be diversified away by investing in both Novina SA and Amica SA 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 Novina SA and Amica SA into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Novina SA and Amica SA, you can compare the effects of market volatilities on Novina SA and Amica SA 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 Novina SA with a short position of Amica SA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Novina SA and Amica SA.
Diversification Opportunities for Novina SA and Amica SA
Very good diversification
The 3 months correlation between Novina and Amica is -0.43. Overlapping area represents the amount of risk that can be diversified away by holding Novina SA and Amica SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Amica SA and Novina SA 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 Novina SA are associated (or correlated) with Amica SA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Amica SA has no effect on the direction of Novina SA i.e., Novina SA and Amica SA go up and down completely randomly.
Pair Corralation between Novina SA and Amica SA
Assuming the 90 days trading horizon Novina SA is expected to under-perform the Amica SA. In addition to that, Novina SA is 1.62 times more volatile than Amica SA. It trades about -0.12 of its total potential returns per unit of risk. Amica SA is currently generating about 0.17 per unit of volatility. If you would invest 5,620 in Amica SA on August 29, 2024 and sell it today you would earn a total of 450.00 from holding Amica SA or generate 8.01% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Novina SA vs. Amica SA
Performance |
| Timeline |
| Novina SA |
| Amica SA |
Novina SA and Amica SA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Novina SA and Amica SA
The main advantage of trading using opposite Novina SA and Amica SA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Novina SA position performs unexpectedly, Amica SA 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 Amica SA will offset losses from the drop in Amica SA's long position.| Novina SA vs. mBank SA | Novina SA vs. Noble Financials SA | Novina SA vs. Live Motion Games | Novina SA vs. ING Bank lski |
| Amica SA vs. Creotech Instruments SA | Amica SA vs. Pyramid Games SA | Amica SA vs. SOFTWARE MANSION SPOLKA | Amica SA vs. Carlson Investments SA |
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 Portfolio Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
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