Correlation Between Svolder AB and Investment
Can any of the company-specific risk be diversified away by investing in both Svolder AB and Investment 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 Investment into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Svolder AB and Investment AB Oresund, you can compare the effects of market volatilities on Svolder AB and Investment 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 Investment. Check out your portfolio center. Please also check ongoing floating volatility patterns of Svolder AB and Investment.
Diversification Opportunities for Svolder AB and Investment
0.75 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Svolder and Investment is 0.75. Overlapping area represents the amount of risk that can be diversified away by holding Svolder AB and Investment AB Oresund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Investment AB Oresund 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 Investment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Investment AB Oresund has no effect on the direction of Svolder AB i.e., Svolder AB and Investment go up and down completely randomly.
Pair Corralation between Svolder AB and Investment
Assuming the 90 days trading horizon Svolder AB is expected to under-perform the Investment. But the stock apears to be less risky and, when comparing its historical volatility, Svolder AB is 1.02 times less risky than Investment. The stock trades about -0.32 of its potential returns per unit of risk. The Investment AB Oresund is currently generating about -0.05 of returns per unit of risk over similar time horizon. If you would invest 11,400 in Investment AB Oresund on August 31, 2024 and sell it today you would lose (200.00) from holding Investment AB Oresund or give up 1.75% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 95.65% |
| Values | Daily Returns |
Svolder AB vs. Investment AB Oresund
Performance |
| Timeline |
| Svolder AB |
| Investment AB Oresund |
Svolder AB and Investment Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Svolder AB and Investment
The main advantage of trading using opposite Svolder AB and Investment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Svolder AB position performs unexpectedly, Investment 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 Investment will offset losses from the drop in Investment'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 |
| Investment vs. Bure Equity AB | Investment vs. Creades AB | Investment vs. L E Lundbergfretagen | Investment 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 CEOs Directory module to screen CEOs from public companies around the world.
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