Correlation Between Novotek AB and Serstech
Can any of the company-specific risk be diversified away by investing in both Novotek AB and Serstech 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 Novotek AB and Serstech into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Novotek AB and Serstech AB, you can compare the effects of market volatilities on Novotek AB and Serstech 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 Novotek AB with a short position of Serstech. Check out your portfolio center. Please also check ongoing floating volatility patterns of Novotek AB and Serstech.
Diversification Opportunities for Novotek AB and Serstech
0.53 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Novotek and Serstech is 0.53. Overlapping area represents the amount of risk that can be diversified away by holding Novotek AB and Serstech AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Serstech AB and Novotek 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 Novotek AB are associated (or correlated) with Serstech. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Serstech AB has no effect on the direction of Novotek AB i.e., Novotek AB and Serstech go up and down completely randomly.
Pair Corralation between Novotek AB and Serstech
Assuming the 90 days trading horizon Novotek AB is expected to generate 2.02 times less return on investment than Serstech. But when comparing it to its historical volatility, Novotek AB is 1.88 times less risky than Serstech. It trades about 0.05 of its potential returns per unit of risk. Serstech AB is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 75.00 in Serstech AB on August 29, 2024 and sell it today you would earn a total of 40.00 from holding Serstech AB or generate 53.33% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Novotek AB vs. Serstech AB
Performance |
| Timeline |
| Novotek AB |
| Serstech AB |
Novotek AB and Serstech Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Novotek AB and Serstech
The main advantage of trading using opposite Novotek AB and Serstech positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Novotek AB position performs unexpectedly, Serstech 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 Serstech will offset losses from the drop in Serstech's long position.| Novotek AB vs. Softronic AB | Novotek AB vs. Prevas AB | Novotek AB vs. FormPipe Software AB | Novotek AB vs. Dedicare AB |
| Serstech vs. Enzymatica publ AB | Serstech vs. Polygiene AB | Serstech vs. Sprint Bioscience AB | Serstech vs. XMReality 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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.
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