Correlation Between Paxman AB and ADDvise Group
Can any of the company-specific risk be diversified away by investing in both Paxman AB and ADDvise Group 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 Paxman AB and ADDvise Group into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Paxman AB and ADDvise Group AB, you can compare the effects of market volatilities on Paxman AB and ADDvise Group 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 Paxman AB with a short position of ADDvise Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of Paxman AB and ADDvise Group.
Diversification Opportunities for Paxman AB and ADDvise Group
-0.68 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Paxman and ADDvise is -0.68. Overlapping area represents the amount of risk that can be diversified away by holding Paxman AB and ADDvise Group AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ADDvise Group AB and Paxman AB 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 Paxman AB are associated (or correlated) with ADDvise Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ADDvise Group AB has no effect on the direction of Paxman AB i.e., Paxman AB and ADDvise Group go up and down completely randomly.
Pair Corralation between Paxman AB and ADDvise Group
Assuming the 90 days trading horizon Paxman AB is expected to generate 0.73 times more return on investment than ADDvise Group. However, Paxman AB is 1.37 times less risky than ADDvise Group. It trades about 0.14 of its potential returns per unit of risk. ADDvise Group AB is currently generating about -0.05 per unit of risk. If you would invest 4,760 in Paxman AB on September 1, 2024 and sell it today you would earn a total of 2,700 from holding Paxman AB or generate 56.72% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Paxman AB vs. ADDvise Group AB
Performance |
| Timeline |
| Paxman AB |
| ADDvise Group AB |
Paxman AB and ADDvise Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Paxman AB and ADDvise Group
The main advantage of trading using opposite Paxman AB and ADDvise Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Paxman AB position performs unexpectedly, ADDvise Group 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 ADDvise Group will offset losses from the drop in ADDvise Group's long position.| Paxman AB vs. Dignitana AB | Paxman AB vs. C Rad AB | Paxman AB vs. Surgical Science Sweden | Paxman AB vs. Sedana Medical AB |
| ADDvise Group vs. ADDvise Group B | ADDvise Group vs. Hanza AB | ADDvise Group vs. Awardit AB | ADDvise Group vs. Doxa 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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.
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