Correlation Between AB Traction and Havsfrun Investment
Can any of the company-specific risk be diversified away by investing in both AB Traction and Havsfrun 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 AB Traction and Havsfrun Investment into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between AB Traction and Havsfrun Investment AB, you can compare the effects of market volatilities on AB Traction and Havsfrun 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 AB Traction with a short position of Havsfrun Investment. Check out your portfolio center. Please also check ongoing floating volatility patterns of AB Traction and Havsfrun Investment.
Diversification Opportunities for AB Traction and Havsfrun Investment
0.21 | Correlation Coefficient |
Modest diversification
The 3 months correlation between TRAC-B and Havsfrun is 0.21. Overlapping area represents the amount of risk that can be diversified away by holding AB Traction and Havsfrun Investment AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Havsfrun Investment and AB Traction 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 AB Traction are associated (or correlated) with Havsfrun Investment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Havsfrun Investment has no effect on the direction of AB Traction i.e., AB Traction and Havsfrun Investment go up and down completely randomly.
Pair Corralation between AB Traction and Havsfrun Investment
Assuming the 90 days trading horizon AB Traction is expected to under-perform the Havsfrun Investment. But the stock apears to be less risky and, when comparing its historical volatility, AB Traction is 1.83 times less risky than Havsfrun Investment. The stock trades about -0.04 of its potential returns per unit of risk. The Havsfrun Investment AB is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 1,210 in Havsfrun Investment AB on September 1, 2024 and sell it today you would earn a total of 10.00 from holding Havsfrun Investment AB or generate 0.83% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 95.65% |
| Values | Daily Returns |
AB Traction vs. Havsfrun Investment AB
Performance |
| Timeline |
| AB Traction |
| Havsfrun Investment |
AB Traction and Havsfrun Investment Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with AB Traction and Havsfrun Investment
The main advantage of trading using opposite AB Traction and Havsfrun Investment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AB Traction position performs unexpectedly, Havsfrun 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 Havsfrun Investment will offset losses from the drop in Havsfrun Investment's long position.| AB Traction vs. Investor AB ser | AB Traction vs. Industrivarden AB ser | AB Traction vs. Tele2 AB | AB Traction vs. Boliden AB |
| Havsfrun Investment vs. Media and Games | Havsfrun Investment vs. KABE Group AB | Havsfrun Investment vs. IAR Systems Group | Havsfrun Investment vs. Norva24 Group 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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.
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