Correlation Between VNV Global and Linc AB
Can any of the company-specific risk be diversified away by investing in both VNV Global and Linc 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 VNV Global and Linc AB into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between VNV Global AB and Linc AB, you can compare the effects of market volatilities on VNV Global and Linc 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 VNV Global with a short position of Linc AB. Check out your portfolio center. Please also check ongoing floating volatility patterns of VNV Global and Linc AB.
Diversification Opportunities for VNV Global and Linc AB
0.78 | Correlation Coefficient |
Poor diversification
The 3 months correlation between VNV and Linc is 0.78. Overlapping area represents the amount of risk that can be diversified away by holding VNV Global AB and Linc AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Linc AB and VNV Global 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 VNV Global AB are associated (or correlated) with Linc AB. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Linc AB has no effect on the direction of VNV Global i.e., VNV Global and Linc AB go up and down completely randomly.
Pair Corralation between VNV Global and Linc AB
Assuming the 90 days trading horizon VNV Global AB is expected to under-perform the Linc AB. In addition to that, VNV Global is 1.32 times more volatile than Linc AB. It trades about -0.01 of its total potential returns per unit of risk. Linc AB is currently generating about 0.04 per unit of volatility. If you would invest 6,440 in Linc AB on September 12, 2024 and sell it today you would earn a total of 1,580 from holding Linc AB or generate 24.53% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
VNV Global AB vs. Linc AB
Performance |
| Timeline |
| VNV Global AB |
| Linc AB |
VNV Global and Linc AB Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with VNV Global and Linc AB
The main advantage of trading using opposite VNV Global and Linc AB positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if VNV Global position performs unexpectedly, Linc 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 Linc AB will offset losses from the drop in Linc AB's long position.| VNV Global vs. Catella AB | VNV Global vs. Catella AB A | VNV Global vs. KABE Group AB | VNV Global vs. IAR Systems Group |
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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.
Other Complementary Tools
| Headlines Timeline Stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity | |
| Idea Optimizer Use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio | |
| Equity Analysis Research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities | |
| Portfolio Manager State of the art Portfolio Manager to monitor and improve performance of your invested capital | |
| Sectors List of equity sectors categorizing publicly traded companies based on their primary business activities |