Correlation Between Vestum AB and Afry AB
Can any of the company-specific risk be diversified away by investing in both Vestum AB and Afry AB 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 Vestum AB and Afry AB into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Vestum AB and Afry AB, you can compare the effects of market volatilities on Vestum AB and Afry AB 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 Vestum AB with a short position of Afry AB. Check out your portfolio center. Please also check ongoing floating volatility patterns of Vestum AB and Afry AB.
Diversification Opportunities for Vestum AB and Afry AB
Excellent diversification
The 3 months correlation between Vestum and Afry is -0.59. Overlapping area represents the amount of risk that can be diversified away by holding Vestum AB and Afry AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Afry AB and Vestum 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 Vestum AB are associated (or correlated) with Afry AB. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Afry AB has no effect on the direction of Vestum AB i.e., Vestum AB and Afry AB go up and down completely randomly.
Pair Corralation between Vestum AB and Afry AB
Assuming the 90 days trading horizon Vestum AB is expected to under-perform the Afry AB. In addition to that, Vestum AB is 1.95 times more volatile than Afry AB. It trades about -0.01 of its total potential returns per unit of risk. Afry AB is currently generating about 0.0 per unit of volatility. If you would invest 16,819 in Afry AB on August 26, 2024 and sell it today you would lose (1,539) from holding Afry AB or give up 9.15% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Vestum AB vs. Afry AB
Performance |
| Timeline |
| Vestum AB |
| Afry AB |
Vestum AB and Afry AB Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Vestum AB and Afry AB
The main advantage of trading using opposite Vestum AB and Afry AB positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Vestum AB position performs unexpectedly, Afry AB 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 Afry AB will offset losses from the drop in Afry AB's long position.| Vestum AB vs. Lifco AB | Vestum AB vs. Sdiptech AB | Vestum AB vs. Vitec Software Group | Vestum AB vs. Addtech 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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.
Other Complementary Tools
| Price Transformation Use Price Transformation models to analyze the depth of different equity instruments across global markets | |
| Funds Screener Find actively-traded funds from around the world traded on over 30 global exchanges | |
| Content Syndication Quickly integrate customizable finance content to your own investment portal | |
| Money Flow Index Determine momentum by analyzing Money Flow Index and other technical indicators | |
| Aroon Oscillator Analyze current equity momentum using Aroon Oscillator and other momentum ratios |