Correlation Between Investment and Nilsson Special
Can any of the company-specific risk be diversified away by investing in both Investment and Nilsson Special 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 Nilsson Special 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 Nilsson Special Vehicles, you can compare the effects of market volatilities on Investment and Nilsson Special 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 Nilsson Special. Check out your portfolio center. Please also check ongoing floating volatility patterns of Investment and Nilsson Special.
Diversification Opportunities for Investment and Nilsson Special
0.76 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Investment and Nilsson is 0.76. Overlapping area represents the amount of risk that can be diversified away by holding Investment AB Oresund and Nilsson Special Vehicles in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nilsson Special Vehicles 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 Nilsson Special. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nilsson Special Vehicles has no effect on the direction of Investment i.e., Investment and Nilsson Special go up and down completely randomly.
Pair Corralation between Investment and Nilsson Special
Assuming the 90 days trading horizon Investment AB Oresund is expected to generate 0.39 times more return on investment than Nilsson Special. However, Investment AB Oresund is 2.6 times less risky than Nilsson Special. It trades about 0.03 of its potential returns per unit of risk. Nilsson Special Vehicles is currently generating about 0.0 per unit of risk. If you would invest 9,173 in Investment AB Oresund on September 13, 2024 and sell it today you would earn a total of 1,807 from holding Investment AB Oresund or generate 19.7% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Investment AB Oresund vs. Nilsson Special Vehicles
Performance |
| Timeline |
| Investment AB Oresund |
| Nilsson Special Vehicles |
Investment and Nilsson Special Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Investment and Nilsson Special
The main advantage of trading using opposite Investment and Nilsson Special positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Investment position performs unexpectedly, Nilsson Special 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 Nilsson Special will offset losses from the drop in Nilsson Special's long position.| Investment vs. Bure Equity AB | Investment vs. Creades AB | Investment vs. L E Lundbergfretagen | Investment vs. Industrivarden AB ser |
| Nilsson Special vs. USWE Sports AB | Nilsson Special vs. SaltX Technology Holding | Nilsson Special vs. Investment AB Oresund | Nilsson Special vs. Episurf Medical 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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.
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