Correlation Between Peab AB and AcadeMedia
Can any of the company-specific risk be diversified away by investing in both Peab AB and AcadeMedia 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 Peab AB and AcadeMedia into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Peab AB and AcadeMedia AB, you can compare the effects of market volatilities on Peab AB and AcadeMedia 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 Peab AB with a short position of AcadeMedia. Check out your portfolio center. Please also check ongoing floating volatility patterns of Peab AB and AcadeMedia.
Diversification Opportunities for Peab AB and AcadeMedia
-0.26 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Peab and AcadeMedia is -0.26. Overlapping area represents the amount of risk that can be diversified away by holding Peab AB and AcadeMedia AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AcadeMedia AB and Peab 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 Peab AB are associated (or correlated) with AcadeMedia. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AcadeMedia AB has no effect on the direction of Peab AB i.e., Peab AB and AcadeMedia go up and down completely randomly.
Pair Corralation between Peab AB and AcadeMedia
Assuming the 90 days trading horizon Peab AB is expected to generate 1.34 times more return on investment than AcadeMedia. However, Peab AB is 1.34 times more volatile than AcadeMedia AB. It trades about 0.1 of its potential returns per unit of risk. AcadeMedia AB is currently generating about 0.06 per unit of risk. If you would invest 5,024 in Peab AB on September 3, 2024 and sell it today you would earn a total of 3,036 from holding Peab AB or generate 60.43% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Peab AB vs. AcadeMedia AB
Performance |
| Timeline |
| Peab AB |
| AcadeMedia AB |
Peab AB and AcadeMedia Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Peab AB and AcadeMedia
The main advantage of trading using opposite Peab AB and AcadeMedia positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Peab AB position performs unexpectedly, AcadeMedia 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 AcadeMedia will offset losses from the drop in AcadeMedia's long position.| Peab AB vs. Beowulf Mining PLC | Peab AB vs. Upsales Technology AB | Peab AB vs. SaltX Technology Holding | Peab AB vs. AcadeMedia AB |
| AcadeMedia vs. Inwido AB | AcadeMedia vs. Alimak Hek Group | AcadeMedia vs. Dometic Group AB | AcadeMedia 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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.
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