Correlation Between Symphony Environmental and Industrivarden
Can any of the company-specific risk be diversified away by investing in both Symphony Environmental and Industrivarden 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 Symphony Environmental and Industrivarden into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Symphony Environmental Technologies and Industrivarden AB ser, you can compare the effects of market volatilities on Symphony Environmental and Industrivarden 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 Symphony Environmental with a short position of Industrivarden. Check out your portfolio center. Please also check ongoing floating volatility patterns of Symphony Environmental and Industrivarden.
Diversification Opportunities for Symphony Environmental and Industrivarden
0.69 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Symphony and Industrivarden is 0.69. Overlapping area represents the amount of risk that can be diversified away by holding Symphony Environmental Technol and Industrivarden AB ser in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Industrivarden AB ser and Symphony Environmental 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 Symphony Environmental Technologies are associated (or correlated) with Industrivarden. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Industrivarden AB ser has no effect on the direction of Symphony Environmental i.e., Symphony Environmental and Industrivarden go up and down completely randomly.
Pair Corralation between Symphony Environmental and Industrivarden
Assuming the 90 days trading horizon Symphony Environmental Technologies is expected to generate 1.19 times more return on investment than Industrivarden. However, Symphony Environmental is 1.19 times more volatile than Industrivarden AB ser. It trades about 0.41 of its potential returns per unit of risk. Industrivarden AB ser is currently generating about 0.31 per unit of risk. If you would invest 290.00 in Symphony Environmental Technologies on October 25, 2024 and sell it today you would earn a total of 35.00 from holding Symphony Environmental Technologies or generate 12.07% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 95.0% |
| Values | Daily Returns |
Symphony Environmental Technol vs. Industrivarden AB ser
Performance |
| Timeline |
| Symphony Environmental |
| Industrivarden AB ser |
Symphony Environmental and Industrivarden Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Symphony Environmental and Industrivarden
The main advantage of trading using opposite Symphony Environmental and Industrivarden positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Symphony Environmental position performs unexpectedly, Industrivarden 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 Industrivarden will offset losses from the drop in Industrivarden's long position.| Symphony Environmental vs. Prosiebensat 1 Media | Symphony Environmental vs. LBG Media PLC | Symphony Environmental vs. Hollywood Bowl Group | Symphony Environmental vs. One Media iP |
| Industrivarden vs. CVS Health Corp | Industrivarden vs. Compagnie Plastic Omnium | Industrivarden vs. British American Tobacco | Industrivarden vs. PureTech Health plc |
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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.
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