Correlation Between Investment and Inwido AB
Can any of the company-specific risk be diversified away by investing in both Investment and Inwido AB 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 Investment and Inwido AB into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Investment AB Oresund and Inwido AB, you can compare the effects of market volatilities on Investment and Inwido 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 Investment with a short position of Inwido AB. Check out your portfolio center. Please also check ongoing floating volatility patterns of Investment and Inwido AB.
Diversification Opportunities for Investment and Inwido AB
0.52 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Investment and Inwido is 0.52. Overlapping area represents the amount of risk that can be diversified away by holding Investment AB Oresund and Inwido AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Inwido AB and Investment 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 Investment AB Oresund are associated (or correlated) with Inwido AB. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Inwido AB has no effect on the direction of Investment i.e., Investment and Inwido AB go up and down completely randomly.
Pair Corralation between Investment and Inwido AB
Assuming the 90 days trading horizon Investment is expected to generate 3.63 times less return on investment than Inwido AB. But when comparing it to its historical volatility, Investment AB Oresund is 1.2 times less risky than Inwido AB. It trades about 0.04 of its potential returns per unit of risk. Inwido AB is currently generating about 0.12 of returns per unit of risk over similar time horizon. If you would invest 12,066 in Inwido AB on October 29, 2024 and sell it today you would earn a total of 7,194 from holding Inwido AB or generate 59.62% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Investment AB Oresund vs. Inwido AB
Performance |
| Timeline |
| Investment AB Oresund |
| Inwido AB |
Investment and Inwido AB Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Investment and Inwido AB
The main advantage of trading using opposite Investment and Inwido AB positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Investment position performs unexpectedly, Inwido 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 Inwido AB will offset losses from the drop in Inwido AB's long position.| Investment vs. Bure Equity AB | Investment vs. Creades AB | Investment vs. L E Lundbergfretagen | Investment vs. Industrivarden AB ser |
| Inwido AB vs. USWE Sports AB | Inwido AB vs. JLT Mobile Computers | Inwido AB vs. New Nordic Healthbrands | Inwido AB vs. Scandic Hotels Group |
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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.
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