Correlation Between Sdiptech and Addtech AB
Can any of the company-specific risk be diversified away by investing in both Sdiptech and Addtech 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 Sdiptech and Addtech AB into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Sdiptech AB and Addtech AB, you can compare the effects of market volatilities on Sdiptech and Addtech 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 Sdiptech with a short position of Addtech AB. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sdiptech and Addtech AB.
Diversification Opportunities for Sdiptech and Addtech AB
0.57 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Sdiptech and Addtech is 0.57. Overlapping area represents the amount of risk that can be diversified away by holding Sdiptech AB and Addtech AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Addtech AB and Sdiptech 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 Sdiptech AB are associated (or correlated) with Addtech AB. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Addtech AB has no effect on the direction of Sdiptech i.e., Sdiptech and Addtech AB go up and down completely randomly.
Pair Corralation between Sdiptech and Addtech AB
Assuming the 90 days trading horizon Sdiptech AB is expected to under-perform the Addtech AB. In addition to that, Sdiptech is 1.35 times more volatile than Addtech AB. It trades about -0.25 of its total potential returns per unit of risk. Addtech AB is currently generating about 0.03 per unit of volatility. If you would invest 29,600 in Addtech AB on August 26, 2024 and sell it today you would earn a total of 240.00 from holding Addtech AB or generate 0.81% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sdiptech AB vs. Addtech AB
Performance |
| Timeline |
| Sdiptech AB |
| Addtech AB |
Sdiptech and Addtech AB Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sdiptech and Addtech AB
The main advantage of trading using opposite Sdiptech and Addtech AB positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sdiptech position performs unexpectedly, Addtech 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 Addtech AB will offset losses from the drop in Addtech AB's long position.| Sdiptech vs. AB Sagax | Sdiptech vs. ALM Equity AB | Sdiptech vs. KABE Group AB | Sdiptech vs. IAR Systems Group |
| Addtech AB vs. Indutrade AB | Addtech AB vs. Lifco AB | Addtech AB vs. Lagercrantz Group AB | Addtech AB vs. AddLife 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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.
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