Correlation Between OMX Stockholm and New Wave
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By analyzing existing cross correlation between OMX Stockholm Mid and New Wave Group, you can compare the effects of market volatilities on OMX Stockholm and New Wave 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 New Wave. Check out your portfolio center. Please also check ongoing floating volatility patterns of OMX Stockholm and New Wave.
Diversification Opportunities for OMX Stockholm and New Wave
0.74 | Correlation Coefficient |
Poor diversification
The 3 months correlation between OMX and New is 0.74. Overlapping area represents the amount of risk that can be diversified away by holding OMX Stockholm Mid and New Wave Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on New Wave Group 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 New Wave. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of New Wave Group has no effect on the direction of OMX Stockholm i.e., OMX Stockholm and New Wave go up and down completely randomly.
Pair Corralation between OMX Stockholm and New Wave
Assuming the 90 days trading horizon OMX Stockholm Mid is expected to generate 0.43 times more return on investment than New Wave. However, OMX Stockholm Mid is 2.34 times less risky than New Wave. It trades about -0.04 of its potential returns per unit of risk. New Wave Group is currently generating about -0.07 per unit of risk. If you would invest 169,651 in OMX Stockholm Mid on August 29, 2024 and sell it today you would lose (8,976) from holding OMX Stockholm Mid or give up 5.29% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 99.21% |
| Values | Daily Returns |
OMX Stockholm Mid vs. New Wave Group
Performance |
| Timeline |
OMX Stockholm and New Wave Volatility Contrast
Predicted Return Density |
| Returns |
OMX Stockholm Mid
Pair trading matchups for OMX Stockholm
New Wave Group
Pair trading matchups for New Wave
Pair Trading with OMX Stockholm and New Wave
The main advantage of trading using opposite OMX Stockholm and New Wave positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if OMX Stockholm position performs unexpectedly, New Wave 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 New Wave will offset losses from the drop in New Wave'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 |
| New Wave vs. Hexatronic Group AB | New Wave vs. Inwido AB | New Wave vs. Lindab International AB | New Wave vs. Byggmax 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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.
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