Correlation Between Upsales Technology and Rottneros
Can any of the company-specific risk be diversified away by investing in both Upsales Technology and Rottneros 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 Upsales Technology and Rottneros into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Upsales Technology AB and Rottneros AB, you can compare the effects of market volatilities on Upsales Technology and Rottneros 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 Upsales Technology with a short position of Rottneros. Check out your portfolio center. Please also check ongoing floating volatility patterns of Upsales Technology and Rottneros.
Diversification Opportunities for Upsales Technology and Rottneros
0.83 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Upsales and Rottneros is 0.83. Overlapping area represents the amount of risk that can be diversified away by holding Upsales Technology AB and Rottneros AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Rottneros AB and Upsales Technology 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 Upsales Technology AB are associated (or correlated) with Rottneros. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Rottneros AB has no effect on the direction of Upsales Technology i.e., Upsales Technology and Rottneros go up and down completely randomly.
Pair Corralation between Upsales Technology and Rottneros
Assuming the 90 days trading horizon Upsales Technology AB is expected to generate 1.36 times more return on investment than Rottneros. However, Upsales Technology is 1.36 times more volatile than Rottneros AB. It trades about -0.04 of its potential returns per unit of risk. Rottneros AB is currently generating about -0.08 per unit of risk. If you would invest 3,260 in Upsales Technology AB on September 1, 2024 and sell it today you would lose (100.00) from holding Upsales Technology AB or give up 3.07% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 95.65% |
| Values | Daily Returns |
Upsales Technology AB vs. Rottneros AB
Performance |
| Timeline |
| Upsales Technology |
| Rottneros AB |
Upsales Technology and Rottneros Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Upsales Technology and Rottneros
The main advantage of trading using opposite Upsales Technology and Rottneros positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Upsales Technology position performs unexpectedly, Rottneros 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 Rottneros will offset losses from the drop in Rottneros' long position.| Upsales Technology vs. Lime Technologies AB | Upsales Technology vs. FormPipe Software AB | Upsales Technology vs. Surgical Science Sweden | Upsales Technology vs. Vitec Software Group |
| Rottneros vs. Holmen AB | Rottneros vs. Svenska Cellulosa Aktiebolaget | Rottneros vs. Husqvarna AB | Rottneros vs. Alfa Laval 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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..
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