Correlation Between AB Volvo and Camurus AB
Can any of the company-specific risk be diversified away by investing in both AB Volvo and Camurus 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 AB Volvo and Camurus AB into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between AB Volvo and Camurus AB, you can compare the effects of market volatilities on AB Volvo and Camurus 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 AB Volvo with a short position of Camurus AB. Check out your portfolio center. Please also check ongoing floating volatility patterns of AB Volvo and Camurus AB.
Diversification Opportunities for AB Volvo and Camurus AB
-0.43 | Correlation Coefficient |
Very good diversification
The 3 months correlation between VOLV-A and Camurus is -0.43. Overlapping area represents the amount of risk that can be diversified away by holding AB Volvo and Camurus AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Camurus AB and AB Volvo 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 AB Volvo are associated (or correlated) with Camurus AB. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Camurus AB has no effect on the direction of AB Volvo i.e., AB Volvo and Camurus AB go up and down completely randomly.
Pair Corralation between AB Volvo and Camurus AB
Assuming the 90 days trading horizon AB Volvo is expected to generate 1.96 times less return on investment than Camurus AB. But when comparing it to its historical volatility, AB Volvo is 1.97 times less risky than Camurus AB. It trades about 0.02 of its potential returns per unit of risk. Camurus AB is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest 53,800 in Camurus AB on August 25, 2024 and sell it today you would earn a total of 3,500 from holding Camurus AB or generate 6.51% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
AB Volvo vs. Camurus AB
Performance |
| Timeline |
| AB Volvo |
| Camurus AB |
AB Volvo and Camurus AB Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with AB Volvo and Camurus AB
The main advantage of trading using opposite AB Volvo and Camurus AB positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AB Volvo position performs unexpectedly, Camurus 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 Camurus AB will offset losses from the drop in Camurus AB's long position.| AB Volvo vs. Investor AB ser | AB Volvo vs. Sandvik AB | AB Volvo vs. Svenska Handelsbanken AB | AB Volvo vs. Atlas Copco AB |
| Camurus AB vs. BioArctic AB | Camurus AB vs. Oncopeptides AB | Camurus AB vs. Hansa Biopharma AB | Camurus AB vs. Swedish Orphan Biovitrum |
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 Global Correlations module to find global opportunities by holding instruments from different markets.
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