Correlation Between Peab AB and Addtech AB
Can any of the company-specific risk be diversified away by investing in both Peab AB and Addtech 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 Peab AB and Addtech AB into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Peab AB and Addtech AB, you can compare the effects of market volatilities on Peab AB and Addtech 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 Peab AB with a short position of Addtech AB. Check out your portfolio center. Please also check ongoing floating volatility patterns of Peab AB and Addtech AB.
Diversification Opportunities for Peab AB and Addtech AB
0.36 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Peab and Addtech is 0.36. Overlapping area represents the amount of risk that can be diversified away by holding Peab AB and Addtech AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Addtech 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 Addtech AB. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Addtech AB has no effect on the direction of Peab AB i.e., Peab AB and Addtech AB go up and down completely randomly.
Pair Corralation between Peab AB and Addtech AB
Assuming the 90 days trading horizon Peab AB is expected to under-perform the Addtech AB. But the stock apears to be less risky and, when comparing its historical volatility, Peab AB is 1.01 times less risky than Addtech AB. The stock trades about -0.14 of its potential returns per unit of risk. The Addtech AB is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest 30,280 in Addtech AB on September 13, 2024 and sell it today you would earn a total of 980.00 from holding Addtech AB or generate 3.24% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Peab AB vs. Addtech AB
Performance |
| Timeline |
| Peab AB |
| Addtech AB |
Peab AB and Addtech AB Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Peab AB and Addtech AB
The main advantage of trading using opposite Peab AB and Addtech AB positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Peab AB position performs unexpectedly, Addtech 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 Addtech AB will offset losses from the drop in Addtech AB's long position.| Peab AB vs. Bravida Holding AB | Peab AB vs. Instalco Intressenter AB | Peab AB vs. NCC AB | Peab AB vs. Fasadgruppen Group AB |
| Addtech AB vs. AddLife AB | Addtech AB vs. Bufab Holding AB | Addtech AB vs. Bergman Beving AB | Addtech AB vs. AQ 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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.
Other Complementary Tools
| Volatility Analysis Get historical volatility and risk analysis based on latest market data | |
| Content Syndication Quickly integrate customizable finance content to your own investment portal | |
| Portfolio Manager State of the art Portfolio Manager to monitor and improve performance of your invested capital | |
| Piotroski F Score Get Piotroski F Score based on the binary analysis strategy of nine different fundamentals | |
| Portfolio Suggestion Get suggestions outside of your existing asset allocation including your own model portfolios |