Correlation Between Prevas AB and Fram Skandinavien
Can any of the company-specific risk be diversified away by investing in both Prevas AB and Fram Skandinavien 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 Prevas AB and Fram Skandinavien into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Prevas AB and Fram Skandinavien AB, you can compare the effects of market volatilities on Prevas AB and Fram Skandinavien 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 Prevas AB with a short position of Fram Skandinavien. Check out your portfolio center. Please also check ongoing floating volatility patterns of Prevas AB and Fram Skandinavien.
Diversification Opportunities for Prevas AB and Fram Skandinavien
0.88 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Prevas and Fram is 0.88. Overlapping area represents the amount of risk that can be diversified away by holding Prevas AB and Fram Skandinavien AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fram Skandinavien and Prevas 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 Prevas AB are associated (or correlated) with Fram Skandinavien. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fram Skandinavien has no effect on the direction of Prevas AB i.e., Prevas AB and Fram Skandinavien go up and down completely randomly.
Pair Corralation between Prevas AB and Fram Skandinavien
Assuming the 90 days trading horizon Prevas AB is expected to generate 0.54 times more return on investment than Fram Skandinavien. However, Prevas AB is 1.86 times less risky than Fram Skandinavien. It trades about 0.01 of its potential returns per unit of risk. Fram Skandinavien AB is currently generating about -0.01 per unit of risk. If you would invest 11,060 in Prevas AB on September 1, 2024 and sell it today you would earn a total of 20.00 from holding Prevas AB or generate 0.18% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 95.65% |
| Values | Daily Returns |
Prevas AB vs. Fram Skandinavien AB
Performance |
| Timeline |
| Prevas AB |
| Fram Skandinavien |
Prevas AB and Fram Skandinavien Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Prevas AB and Fram Skandinavien
The main advantage of trading using opposite Prevas AB and Fram Skandinavien positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Prevas AB position performs unexpectedly, Fram Skandinavien 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 Fram Skandinavien will offset losses from the drop in Fram Skandinavien's long position.| Prevas AB vs. Softronic AB | Prevas AB vs. Novotek AB | Prevas AB vs. Svedbergs i Dalstorp | Prevas AB vs. Know IT AB |
| Fram Skandinavien vs. Greater Than AB | Fram Skandinavien vs. Diadrom Holding AB | Fram Skandinavien vs. Corline Biomedical AB | Fram Skandinavien vs. BIMobject 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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.
Other Complementary Tools
| Watchlist Optimization Optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm | |
| ETF Categories List of ETF categories grouped based on various criteria, such as the investment strategy or type of investments | |
| Share Portfolio Track or share privately all of your investments from the convenience of any device | |
| Economic Indicators Top statistical indicators that provide insights into how an economy is performing | |
| CEOs Directory Screen CEOs from public companies around the world |