Correlation Between Online Brands and Investment
Can any of the company-specific risk be diversified away by investing in both Online Brands and Investment 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 Online Brands and Investment into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Online Brands Nordic and Investment AB Oresund, you can compare the effects of market volatilities on Online Brands and Investment 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 Online Brands with a short position of Investment. Check out your portfolio center. Please also check ongoing floating volatility patterns of Online Brands and Investment.
Diversification Opportunities for Online Brands and Investment
0.19 | Correlation Coefficient |
Average diversification
The 3 months correlation between Online and Investment is 0.19. Overlapping area represents the amount of risk that can be diversified away by holding Online Brands Nordic and Investment AB Oresund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Investment AB Oresund and Online Brands 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 Online Brands Nordic are associated (or correlated) with Investment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Investment AB Oresund has no effect on the direction of Online Brands i.e., Online Brands and Investment go up and down completely randomly.
Pair Corralation between Online Brands and Investment
Assuming the 90 days trading horizon Online Brands is expected to generate 3.83 times less return on investment than Investment. In addition to that, Online Brands is 3.39 times more volatile than Investment AB Oresund. It trades about 0.0 of its total potential returns per unit of risk. Investment AB Oresund is currently generating about 0.03 per unit of volatility. If you would invest 9,748 in Investment AB Oresund on August 31, 2024 and sell it today you would earn a total of 1,412 from holding Investment AB Oresund or generate 14.49% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 99.73% |
| Values | Daily Returns |
Online Brands Nordic vs. Investment AB Oresund
Performance |
| Timeline |
| Online Brands Nordic |
| Investment AB Oresund |
Online Brands and Investment Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Online Brands and Investment
The main advantage of trading using opposite Online Brands and Investment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Online Brands position performs unexpectedly, Investment 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 Investment will offset losses from the drop in Investment's long position.| Online Brands vs. NetJobs Group AB | Online Brands vs. Mantex AB | Online Brands vs. Doxa AB | Online Brands vs. Clean Motion AB |
| Investment vs. Bure Equity AB | Investment vs. Creades AB | Investment vs. L E Lundbergfretagen | Investment vs. Industrivarden AB ser |
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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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