Correlation Between SECITS Holding and DevPort AB
Can any of the company-specific risk be diversified away by investing in both SECITS Holding and DevPort 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 SECITS Holding and DevPort AB 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 DevPort AB, you can compare the effects of market volatilities on SECITS Holding and DevPort 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 SECITS Holding with a short position of DevPort AB. Check out your portfolio center. Please also check ongoing floating volatility patterns of SECITS Holding and DevPort AB.
Diversification Opportunities for SECITS Holding and DevPort AB
0.63 | Correlation Coefficient |
Poor diversification
The 3 months correlation between SECITS and DevPort is 0.63. Overlapping area represents the amount of risk that can be diversified away by holding SECITS Holding AB and DevPort AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on DevPort 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 DevPort AB. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of DevPort AB has no effect on the direction of SECITS Holding i.e., SECITS Holding and DevPort AB go up and down completely randomly.
Pair Corralation between SECITS Holding and DevPort AB
Assuming the 90 days trading horizon SECITS Holding AB is expected to generate 9.76 times more return on investment than DevPort AB. However, SECITS Holding is 9.76 times more volatile than DevPort AB. It trades about 0.07 of its potential returns per unit of risk. DevPort AB is currently generating about -0.13 per unit of risk. If you would invest 2.00 in SECITS Holding AB on September 1, 2024 and sell it today you would earn a total of 0.04 from holding SECITS Holding AB or generate 2.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 95.65% |
| Values | Daily Returns |
SECITS Holding AB vs. DevPort AB
Performance |
| Timeline |
| SECITS Holding AB |
| DevPort AB |
SECITS Holding and DevPort AB Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SECITS Holding and DevPort AB
The main advantage of trading using opposite SECITS Holding and DevPort AB positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SECITS Holding position performs unexpectedly, DevPort 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 DevPort AB will offset losses from the drop in DevPort AB's long position.| SECITS Holding vs. DevPort AB | SECITS Holding vs. B3 Consulting Group | SECITS Holding vs. Micro Systemation AB |
| DevPort AB vs. CAG Group AB | DevPort AB vs. Avensia publ AB | DevPort AB vs. Precio Fishbone AB | DevPort AB vs. B3 Consulting Group |
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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.
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