Correlation Between VIMAB Group and Novotek AB
Can any of the company-specific risk be diversified away by investing in both VIMAB Group and Novotek 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 VIMAB Group and Novotek AB into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between VIMAB Group AB and Novotek AB, you can compare the effects of market volatilities on VIMAB Group and Novotek 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 VIMAB Group with a short position of Novotek AB. Check out your portfolio center. Please also check ongoing floating volatility patterns of VIMAB Group and Novotek AB.
Diversification Opportunities for VIMAB Group and Novotek AB
-0.48 | Correlation Coefficient |
Very good diversification
The 3 months correlation between VIMAB and Novotek is -0.48. Overlapping area represents the amount of risk that can be diversified away by holding VIMAB Group AB and Novotek AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Novotek AB and VIMAB Group 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 VIMAB Group AB are associated (or correlated) with Novotek AB. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Novotek AB has no effect on the direction of VIMAB Group i.e., VIMAB Group and Novotek AB go up and down completely randomly.
Pair Corralation between VIMAB Group and Novotek AB
Assuming the 90 days trading horizon VIMAB Group AB is expected to generate 2.76 times more return on investment than Novotek AB. However, VIMAB Group is 2.76 times more volatile than Novotek AB. It trades about 0.02 of its potential returns per unit of risk. Novotek AB is currently generating about 0.03 per unit of risk. If you would invest 899.00 in VIMAB Group AB on January 24, 2025 and sell it today you would lose (77.00) from holding VIMAB Group AB or give up 8.57% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
VIMAB Group AB vs. Novotek AB
Performance |
| Timeline |
| VIMAB Group AB |
| Novotek AB |
VIMAB Group and Novotek AB Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with VIMAB Group and Novotek AB
The main advantage of trading using opposite VIMAB Group and Novotek AB positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if VIMAB Group position performs unexpectedly, Novotek 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 Novotek AB will offset losses from the drop in Novotek AB's long position.| VIMAB Group vs. Nordic Asia Investment | VIMAB Group vs. Skandinaviska Enskilda Banken | VIMAB Group vs. JLT Mobile Computers | VIMAB Group vs. SaveLend Group AB |
| Novotek AB vs. Softronic AB | Novotek AB vs. Prevas AB | Novotek AB vs. FormPipe Software AB | Novotek AB vs. NOTE 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 Portfolio Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
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