Correlation Between Rolling Optics and Advenica
Can any of the company-specific risk be diversified away by investing in both Rolling Optics and Advenica 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 Rolling Optics and Advenica into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Rolling Optics Holding and Advenica AB, you can compare the effects of market volatilities on Rolling Optics and Advenica 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 Rolling Optics with a short position of Advenica. Check out your portfolio center. Please also check ongoing floating volatility patterns of Rolling Optics and Advenica.
Diversification Opportunities for Rolling Optics and Advenica
0.61 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Rolling and Advenica is 0.61. Overlapping area represents the amount of risk that can be diversified away by holding Rolling Optics Holding and Advenica AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Advenica AB and Rolling Optics 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 Rolling Optics Holding are associated (or correlated) with Advenica. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Advenica AB has no effect on the direction of Rolling Optics i.e., Rolling Optics and Advenica go up and down completely randomly.
Pair Corralation between Rolling Optics and Advenica
Assuming the 90 days horizon Rolling Optics Holding is expected to generate 1.34 times more return on investment than Advenica. However, Rolling Optics is 1.34 times more volatile than Advenica AB. It trades about -0.03 of its potential returns per unit of risk. Advenica AB is currently generating about -0.17 per unit of risk. If you would invest 75.00 in Rolling Optics Holding on August 28, 2024 and sell it today you would lose (4.00) from holding Rolling Optics Holding or give up 5.33% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Rolling Optics Holding vs. Advenica AB
Performance |
| Timeline |
| Rolling Optics Holding |
| Advenica AB |
Rolling Optics and Advenica Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Rolling Optics and Advenica
The main advantage of trading using opposite Rolling Optics and Advenica positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Rolling Optics position performs unexpectedly, Advenica 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 Advenica will offset losses from the drop in Advenica's long position.| Rolling Optics vs. Integrum AB Series | Rolling Optics vs. Concejo AB | Rolling Optics vs. Diadrom Holding AB | Rolling Optics vs. Greater Than AB |
| Advenica vs. SECITS Holding AB | Advenica vs. Zaplox AB | Advenica vs. XMReality AB | Advenica vs. Nicoccino Holding 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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.
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