Correlation Between Vestum AB and Doxa AB
Can any of the company-specific risk be diversified away by investing in both Vestum AB and Doxa 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 Doxa 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 Doxa AB, you can compare the effects of market volatilities on Vestum AB and Doxa 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 Doxa AB. Check out your portfolio center. Please also check ongoing floating volatility patterns of Vestum AB and Doxa AB.
Diversification Opportunities for Vestum AB and Doxa AB
Good diversification
The 3 months correlation between Vestum and Doxa is -0.1. Overlapping area represents the amount of risk that can be diversified away by holding Vestum AB and Doxa AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Doxa 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 Doxa AB. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Doxa AB has no effect on the direction of Vestum AB i.e., Vestum AB and Doxa AB go up and down completely randomly.
Pair Corralation between Vestum AB and Doxa AB
Assuming the 90 days trading horizon Vestum AB is expected to generate 1.18 times more return on investment than Doxa AB. However, Vestum AB is 1.18 times more volatile than Doxa AB. It trades about -0.01 of its potential returns per unit of risk. Doxa AB is currently generating about -0.08 per unit of risk. If you would invest 1,710 in Vestum AB on August 30, 2024 and sell it today you would lose (692.00) from holding Vestum AB or give up 40.47% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Vestum AB vs. Doxa AB
Performance |
| Timeline |
| Vestum AB |
| Doxa AB |
Vestum AB and Doxa AB Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Vestum AB and Doxa AB
The main advantage of trading using opposite Vestum AB and Doxa AB positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Vestum AB position performs unexpectedly, Doxa 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 Doxa AB will offset losses from the drop in Doxa AB's long position.| Vestum AB vs. Sweco AB | Vestum AB vs. AAK AB | Vestum AB vs. Beijer Ref AB | Vestum AB vs. Bravida Holding AB |
| Doxa AB vs. Mantex AB | Doxa AB vs. Genovis AB | Doxa AB vs. Vestum AB | Doxa AB vs. Karolinska Development 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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.
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