Correlation Between SECITS Holding and Advenica
Can any of the company-specific risk be diversified away by investing in both SECITS Holding 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 SECITS Holding and Advenica into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SECITS Holding AB and Advenica AB, you can compare the effects of market volatilities on SECITS Holding 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 SECITS Holding with a short position of Advenica. Check out your portfolio center. Please also check ongoing floating volatility patterns of SECITS Holding and Advenica.
Diversification Opportunities for SECITS Holding and Advenica
0.67 | Correlation Coefficient |
Poor diversification
The 3 months correlation between SECITS and Advenica is 0.67. Overlapping area represents the amount of risk that can be diversified away by holding SECITS Holding AB and Advenica AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Advenica AB and SECITS Holding 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 SECITS Holding AB 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 SECITS Holding i.e., SECITS Holding and Advenica go up and down completely randomly.
Pair Corralation between SECITS Holding and Advenica
Assuming the 90 days trading horizon SECITS Holding AB is expected to generate 5.04 times more return on investment than Advenica. However, SECITS Holding is 5.04 times more volatile than Advenica AB. It trades about 0.12 of its potential returns per unit of risk. Advenica AB is currently generating about -0.17 per unit of risk. If you would invest 1.64 in SECITS Holding AB on August 29, 2024 and sell it today you would earn a total of 0.34 from holding SECITS Holding AB or generate 20.73% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
SECITS Holding AB vs. Advenica AB
Performance |
| Timeline |
| SECITS Holding AB |
| Advenica AB |
SECITS Holding and Advenica Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SECITS Holding and Advenica
The main advantage of trading using opposite SECITS Holding and Advenica positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SECITS Holding 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.| SECITS Holding vs. Enersize Oy | SECITS Holding vs. Zaplox AB | SECITS Holding vs. XMReality AB | SECITS Holding vs. Sonetel 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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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