Correlation Between AB Sagax and Volati AB
Can any of the company-specific risk be diversified away by investing in both AB Sagax and Volati 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 AB Sagax and Volati AB into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between AB Sagax and Volati AB, you can compare the effects of market volatilities on AB Sagax and Volati 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 AB Sagax with a short position of Volati AB. Check out your portfolio center. Please also check ongoing floating volatility patterns of AB Sagax and Volati AB.
Diversification Opportunities for AB Sagax and Volati AB
Almost no diversification
The 3 months correlation between SAGA-D and Volati is 0.94. Overlapping area represents the amount of risk that can be diversified away by holding AB Sagax and Volati AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Volati AB and AB Sagax 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 AB Sagax are associated (or correlated) with Volati AB. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Volati AB has no effect on the direction of AB Sagax i.e., AB Sagax and Volati AB go up and down completely randomly.
Pair Corralation between AB Sagax and Volati AB
Assuming the 90 days trading horizon AB Sagax is expected to under-perform the Volati AB. But the stock apears to be less risky and, when comparing its historical volatility, AB Sagax is 3.09 times less risky than Volati AB. The stock trades about -0.04 of its potential returns per unit of risk. The Volati AB is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest 9,110 in Volati AB on September 18, 2024 and sell it today you would earn a total of 60.00 from holding Volati AB or generate 0.66% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
AB Sagax vs. Volati AB
Performance |
| Timeline |
| AB Sagax |
| Volati AB |
AB Sagax and Volati AB Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with AB Sagax and Volati AB
The main advantage of trading using opposite AB Sagax and Volati AB positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AB Sagax position performs unexpectedly, Volati 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 Volati AB will offset losses from the drop in Volati AB's long position.| AB Sagax vs. ALM Equity AB | AB Sagax vs. Fastighets AB Balder | AB Sagax vs. KABE Group AB | AB Sagax vs. IAR Systems Group |
| Volati AB vs. Green Landscaping Group | Volati AB vs. Instalco Intressenter AB | Volati AB vs. Fasadgruppen Group 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 Dashboard module to portfolio dashboard that provides centralized access to all your investments.
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