Correlation Between OMX Stockholm and AddLife AB
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By analyzing existing cross correlation between OMX Stockholm Mid and AddLife AB, you can compare the effects of market volatilities on OMX Stockholm and AddLife 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 OMX Stockholm with a short position of AddLife AB. Check out your portfolio center. Please also check ongoing floating volatility patterns of OMX Stockholm and AddLife AB.
Diversification Opportunities for OMX Stockholm and AddLife AB
0.68 | Correlation Coefficient |
Poor diversification
The 3 months correlation between OMX and AddLife is 0.68. Overlapping area represents the amount of risk that can be diversified away by holding OMX Stockholm Mid and AddLife AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AddLife AB and OMX Stockholm 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 OMX Stockholm Mid are associated (or correlated) with AddLife AB. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AddLife AB has no effect on the direction of OMX Stockholm i.e., OMX Stockholm and AddLife AB go up and down completely randomly.
Pair Corralation between OMX Stockholm and AddLife AB
Assuming the 90 days trading horizon OMX Stockholm Mid is expected to generate 0.5 times more return on investment than AddLife AB. However, OMX Stockholm Mid is 2.0 times less risky than AddLife AB. It trades about -0.2 of its potential returns per unit of risk. AddLife AB is currently generating about -0.13 per unit of risk. If you would invest 167,920 in OMX Stockholm Mid on August 28, 2024 and sell it today you would lose (5,515) from holding OMX Stockholm Mid or give up 3.28% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
OMX Stockholm Mid vs. AddLife AB
Performance |
| Timeline |
OMX Stockholm and AddLife AB Volatility Contrast
Predicted Return Density |
| Returns |
OMX Stockholm Mid
Pair trading matchups for OMX Stockholm
AddLife AB
Pair trading matchups for AddLife AB
Pair Trading with OMX Stockholm and AddLife AB
The main advantage of trading using opposite OMX Stockholm and AddLife AB positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if OMX Stockholm position performs unexpectedly, AddLife 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 AddLife AB will offset losses from the drop in AddLife AB's long position.| OMX Stockholm vs. Skandinaviska Enskilda Banken | OMX Stockholm vs. Indutrade AB | OMX Stockholm vs. Arion banki hf | OMX Stockholm vs. Fractal Gaming Group |
| AddLife AB vs. Addtech AB | AddLife AB vs. Lifco AB | AddLife AB vs. Indutrade AB | AddLife AB vs. Lagercrantz 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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
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