Correlation Between Rolling Optics and Alleima AB
Can any of the company-specific risk be diversified away by investing in both Rolling Optics and Alleima 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 Rolling Optics and Alleima AB 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 Alleima AB, you can compare the effects of market volatilities on Rolling Optics and Alleima 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 Rolling Optics with a short position of Alleima AB. Check out your portfolio center. Please also check ongoing floating volatility patterns of Rolling Optics and Alleima AB.
Diversification Opportunities for Rolling Optics and Alleima AB
-0.31 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Rolling and Alleima is -0.31. Overlapping area represents the amount of risk that can be diversified away by holding Rolling Optics Holding and Alleima AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Alleima 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 Alleima AB. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Alleima AB has no effect on the direction of Rolling Optics i.e., Rolling Optics and Alleima AB go up and down completely randomly.
Pair Corralation between Rolling Optics and Alleima AB
Assuming the 90 days horizon Rolling Optics Holding is expected to under-perform the Alleima AB. In addition to that, Rolling Optics is 1.95 times more volatile than Alleima AB. It trades about -0.03 of its total potential returns per unit of risk. Alleima AB is currently generating about 0.45 per unit of volatility. If you would invest 7,625 in Alleima AB on November 5, 2024 and sell it today you would earn a total of 1,600 from holding Alleima AB or generate 20.98% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Rolling Optics Holding vs. Alleima AB
Performance |
| Timeline |
| Rolling Optics Holding |
| Alleima AB |
Rolling Optics and Alleima AB Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Rolling Optics and Alleima AB
The main advantage of trading using opposite Rolling Optics and Alleima AB positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Rolling Optics position performs unexpectedly, Alleima 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 Alleima AB will offset losses from the drop in Alleima AB's long position.| Rolling Optics vs. Zwipe AS | Rolling Optics vs. Zaplox AB | Rolling Optics vs. XMReality AB | Rolling Optics vs. Ratos AB |
| Alleima AB vs. Sandvik AB | Alleima AB vs. AB SKF | Alleima AB vs. Svenska Handelsbanken AB | Alleima AB vs. Essity 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 Portfolio Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.
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