Correlation Between Rottneros and NOTE AB
Can any of the company-specific risk be diversified away by investing in both Rottneros and NOTE 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 Rottneros and NOTE AB into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Rottneros AB and NOTE AB, you can compare the effects of market volatilities on Rottneros and NOTE 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 Rottneros with a short position of NOTE AB. Check out your portfolio center. Please also check ongoing floating volatility patterns of Rottneros and NOTE AB.
Diversification Opportunities for Rottneros and NOTE AB
Excellent diversification
The 3 months correlation between Rottneros and NOTE is -0.54. Overlapping area represents the amount of risk that can be diversified away by holding Rottneros AB and NOTE AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NOTE AB and Rottneros 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 Rottneros AB are associated (or correlated) with NOTE AB. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NOTE AB has no effect on the direction of Rottneros i.e., Rottneros and NOTE AB go up and down completely randomly.
Pair Corralation between Rottneros and NOTE AB
Assuming the 90 days trading horizon Rottneros AB is expected to generate 0.49 times more return on investment than NOTE AB. However, Rottneros AB is 2.05 times less risky than NOTE AB. It trades about 0.56 of its potential returns per unit of risk. NOTE AB is currently generating about 0.2 per unit of risk. If you would invest 898.00 in Rottneros AB on October 25, 2024 and sell it today you would earn a total of 55.00 from holding Rottneros AB or generate 6.12% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Rottneros AB vs. NOTE AB
Performance |
| Timeline |
| Rottneros AB |
| NOTE AB |
Rottneros and NOTE AB Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Rottneros and NOTE AB
The main advantage of trading using opposite Rottneros and NOTE AB positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Rottneros position performs unexpectedly, NOTE 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 NOTE AB will offset losses from the drop in NOTE AB's long position.| Rottneros vs. BillerudKorsnas AB | Rottneros vs. SSAB AB | Rottneros vs. Svenska Cellulosa Aktiebolaget | Rottneros vs. Axfood AB |
| NOTE AB vs. Nexam Chemical Holding | NOTE AB vs. FormPipe Software AB | NOTE AB vs. Lundin Mining | NOTE AB vs. Zenicor Medical Systems |
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 Transaction History module to view history of all your transactions and understand their impact on performance.
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