Correlation Between Prevas AB and ProfilGruppen
Can any of the company-specific risk be diversified away by investing in both Prevas AB and ProfilGruppen 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 ProfilGruppen into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Prevas AB and ProfilGruppen AB, you can compare the effects of market volatilities on Prevas AB and ProfilGruppen 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 ProfilGruppen. Check out your portfolio center. Please also check ongoing floating volatility patterns of Prevas AB and ProfilGruppen.
Diversification Opportunities for Prevas AB and ProfilGruppen
-0.69 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Prevas and ProfilGruppen is -0.69. Overlapping area represents the amount of risk that can be diversified away by holding Prevas AB and ProfilGruppen AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ProfilGruppen AB 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 ProfilGruppen. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ProfilGruppen AB has no effect on the direction of Prevas AB i.e., Prevas AB and ProfilGruppen go up and down completely randomly.
Pair Corralation between Prevas AB and ProfilGruppen
Assuming the 90 days trading horizon Prevas AB is expected to under-perform the ProfilGruppen. But the stock apears to be less risky and, when comparing its historical volatility, Prevas AB is 1.35 times less risky than ProfilGruppen. The stock trades about -0.08 of its potential returns per unit of risk. The ProfilGruppen AB is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 11,600 in ProfilGruppen AB on November 27, 2024 and sell it today you would earn a total of 150.00 from holding ProfilGruppen AB or generate 1.29% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Prevas AB vs. ProfilGruppen AB
Performance |
| Timeline |
| Prevas AB |
| ProfilGruppen AB |
Prevas AB and ProfilGruppen Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Prevas AB and ProfilGruppen
The main advantage of trading using opposite Prevas AB and ProfilGruppen positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Prevas AB position performs unexpectedly, ProfilGruppen 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 ProfilGruppen will offset losses from the drop in ProfilGruppen'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 |
| ProfilGruppen vs. Svedbergs i Dalstorp | ProfilGruppen vs. Softronic AB | ProfilGruppen vs. Novotek AB | ProfilGruppen vs. Prevas 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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.
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