Correlation Between Vef AB and Investor
Can any of the company-specific risk be diversified away by investing in both Vef AB and Investor 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 Vef AB and Investor into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Vef AB and Investor AB ser, you can compare the effects of market volatilities on Vef AB and Investor 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 Vef AB with a short position of Investor. Check out your portfolio center. Please also check ongoing floating volatility patterns of Vef AB and Investor.
Diversification Opportunities for Vef AB and Investor
Poor diversification
The 3 months correlation between Vef and Investor is 0.68. Overlapping area represents the amount of risk that can be diversified away by holding Vef AB and Investor AB ser in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Investor AB ser and Vef 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 Vef AB are associated (or correlated) with Investor. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Investor AB ser has no effect on the direction of Vef AB i.e., Vef AB and Investor go up and down completely randomly.
Pair Corralation between Vef AB and Investor
Assuming the 90 days trading horizon Vef AB is expected to under-perform the Investor. In addition to that, Vef AB is 2.83 times more volatile than Investor AB ser. It trades about -0.1 of its total potential returns per unit of risk. Investor AB ser is currently generating about -0.06 per unit of volatility. If you would invest 30,266 in Investor AB ser on September 3, 2024 and sell it today you would lose (341.00) from holding Investor AB ser or give up 1.13% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Vef AB vs. Investor AB ser
Performance |
| Timeline |
| Vef AB |
| Investor AB ser |
Vef AB and Investor Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Vef AB and Investor
The main advantage of trading using opposite Vef AB and Investor positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Vef AB position performs unexpectedly, Investor 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 Investor will offset losses from the drop in Investor's long position.| Vef AB vs. L E Lundbergfretagen | Vef AB vs. Industrivarden AB ser | Vef AB vs. Svenska Handelsbanken AB | Vef AB vs. Investment AB Latour |
| Investor vs. Kinnevik Investment AB | Investor vs. Investment AB Latour | Investor vs. Samhllsbyggnadsbolaget i Norden | Investor 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 Stocks Directory module to find actively traded stocks across global markets.
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