Correlation Between Vestum AB and Elekta AB
Can any of the company-specific risk be diversified away by investing in both Vestum AB and Elekta 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 Elekta 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 Elekta AB, you can compare the effects of market volatilities on Vestum AB and Elekta 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 Elekta AB. Check out your portfolio center. Please also check ongoing floating volatility patterns of Vestum AB and Elekta AB.
Diversification Opportunities for Vestum AB and Elekta AB
Very good diversification
The 3 months correlation between Vestum and Elekta is -0.33. Overlapping area represents the amount of risk that can be diversified away by holding Vestum AB and Elekta AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Elekta 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 Elekta AB. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Elekta AB has no effect on the direction of Vestum AB i.e., Vestum AB and Elekta AB go up and down completely randomly.
Pair Corralation between Vestum AB and Elekta AB
Assuming the 90 days trading horizon Vestum AB is expected to under-perform the Elekta AB. In addition to that, Vestum AB is 1.73 times more volatile than Elekta AB. It trades about -0.05 of its total potential returns per unit of risk. Elekta AB is currently generating about 0.04 per unit of volatility. If you would invest 6,430 in Elekta AB on September 2, 2024 and sell it today you would earn a total of 75.00 from holding Elekta AB or generate 1.17% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Vestum AB vs. Elekta AB
Performance |
| Timeline |
| Vestum AB |
| Elekta AB |
Vestum AB and Elekta AB Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Vestum AB and Elekta AB
The main advantage of trading using opposite Vestum AB and Elekta AB positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Vestum AB position performs unexpectedly, Elekta 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 Elekta AB will offset losses from the drop in Elekta AB's long position.| Vestum AB vs. Hexatronic Group AB | Vestum AB vs. Storskogen Group AB | Vestum AB vs. Sinch AB | Vestum AB vs. Samhllsbyggnadsbolaget i Norden |
| Elekta AB vs. AddLife AB | Elekta AB vs. Biotage AB | Elekta AB vs. Synsam AB | Elekta AB vs. Bonesupport Holding 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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
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