Correlation Between Stille AB and ADDvise Group
Can any of the company-specific risk be diversified away by investing in both Stille AB and ADDvise Group 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 Stille AB and ADDvise Group into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Stille AB and ADDvise Group B, you can compare the effects of market volatilities on Stille AB and ADDvise Group 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 Stille AB with a short position of ADDvise Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of Stille AB and ADDvise Group.
Diversification Opportunities for Stille AB and ADDvise Group
0.26 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Stille and ADDvise is 0.26. Overlapping area represents the amount of risk that can be diversified away by holding Stille AB and ADDvise Group B in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ADDvise Group B and Stille AB 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 Stille AB are associated (or correlated) with ADDvise Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ADDvise Group B has no effect on the direction of Stille AB i.e., Stille AB and ADDvise Group go up and down completely randomly.
Pair Corralation between Stille AB and ADDvise Group
Assuming the 90 days trading horizon Stille AB is expected to generate 0.37 times more return on investment than ADDvise Group. However, Stille AB is 2.69 times less risky than ADDvise Group. It trades about 0.14 of its potential returns per unit of risk. ADDvise Group B is currently generating about -0.16 per unit of risk. If you would invest 20,800 in Stille AB on September 1, 2024 and sell it today you would earn a total of 1,200 from holding Stille AB or generate 5.77% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 95.65% |
| Values | Daily Returns |
Stille AB vs. ADDvise Group B
Performance |
| Timeline |
| Stille AB |
| ADDvise Group B |
Stille AB and ADDvise Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Stille AB and ADDvise Group
The main advantage of trading using opposite Stille AB and ADDvise Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Stille AB position performs unexpectedly, ADDvise Group 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 ADDvise Group will offset losses from the drop in ADDvise Group's long position.| Stille AB vs. C Rad AB | Stille AB vs. CellaVision AB | Stille AB vs. Boule Diagnostics AB | Stille AB vs. Genovis AB |
| ADDvise Group vs. Xvivo Perfusion AB | ADDvise Group vs. BICO Group AB | ADDvise Group vs. Bactiguard Holding AB | ADDvise Group vs. Stille 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 Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
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