Correlation Between OMX Stockholm and Arjo AB
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By analyzing existing cross correlation between OMX Stockholm Mid and Arjo AB, you can compare the effects of market volatilities on OMX Stockholm and Arjo 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 Arjo AB. Check out your portfolio center. Please also check ongoing floating volatility patterns of OMX Stockholm and Arjo AB.
Diversification Opportunities for OMX Stockholm and Arjo AB
0.64 | Correlation Coefficient |
Poor diversification
The 3 months correlation between OMX and Arjo is 0.64. Overlapping area represents the amount of risk that can be diversified away by holding OMX Stockholm Mid and Arjo AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Arjo 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 Arjo AB. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Arjo AB has no effect on the direction of OMX Stockholm i.e., OMX Stockholm and Arjo AB go up and down completely randomly.
Pair Corralation between OMX Stockholm and Arjo AB
Assuming the 90 days trading horizon OMX Stockholm Mid is expected to generate 0.31 times more return on investment than Arjo AB. However, OMX Stockholm Mid is 3.27 times less risky than Arjo AB. It trades about -0.06 of its potential returns per unit of risk. Arjo AB is currently generating about -0.1 per unit of risk. If you would invest 169,054 in OMX Stockholm Mid on September 2, 2024 and sell it today you would lose (5,567) from holding OMX Stockholm Mid or give up 3.29% 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. Arjo AB
Performance |
| Timeline |
OMX Stockholm and Arjo AB Volatility Contrast
Predicted Return Density |
| Returns |
OMX Stockholm Mid
Pair trading matchups for OMX Stockholm
Arjo AB
Pair trading matchups for Arjo AB
Pair Trading with OMX Stockholm and Arjo AB
The main advantage of trading using opposite OMX Stockholm and Arjo AB positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if OMX Stockholm position performs unexpectedly, Arjo 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 Arjo AB will offset losses from the drop in Arjo AB's long position.| OMX Stockholm vs. FormPipe Software AB | OMX Stockholm vs. I Tech | OMX Stockholm vs. G5 Entertainment publ | OMX Stockholm vs. OptiCept Technologies 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 Stocks Directory module to find actively traded stocks across global markets.
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