Correlation Between Svolder AB and Linc AB
Can any of the company-specific risk be diversified away by investing in both Svolder AB and Linc 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 Svolder AB and Linc AB into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Svolder AB and Linc AB, you can compare the effects of market volatilities on Svolder AB and Linc 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 Svolder AB with a short position of Linc AB. Check out your portfolio center. Please also check ongoing floating volatility patterns of Svolder AB and Linc AB.
Diversification Opportunities for Svolder AB and Linc AB
0.73 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Svolder and Linc is 0.73. Overlapping area represents the amount of risk that can be diversified away by holding Svolder AB and Linc AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Linc AB and Svolder 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 Svolder AB are associated (or correlated) with Linc AB. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Linc AB has no effect on the direction of Svolder AB i.e., Svolder AB and Linc AB go up and down completely randomly.
Pair Corralation between Svolder AB and Linc AB
Assuming the 90 days trading horizon Svolder AB is expected to under-perform the Linc AB. But the stock apears to be less risky and, when comparing its historical volatility, Svolder AB is 1.35 times less risky than Linc AB. The stock trades about 0.0 of its potential returns per unit of risk. The Linc AB is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 6,440 in Linc AB on September 12, 2024 and sell it today you would earn a total of 1,580 from holding Linc AB or generate 24.53% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Svolder AB vs. Linc AB
Performance |
| Timeline |
| Svolder AB |
| Linc AB |
Svolder AB and Linc AB Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Svolder AB and Linc AB
The main advantage of trading using opposite Svolder AB and Linc AB positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Svolder AB position performs unexpectedly, Linc 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 Linc AB will offset losses from the drop in Linc AB's long position.| Svolder AB vs. Investment AB Latour | Svolder AB vs. Bure Equity AB | Svolder AB vs. Kinnevik Investment AB | Svolder AB vs. Industrivarden AB ser |
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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.
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