Correlation Between AB Volvo and Cint Group
Can any of the company-specific risk be diversified away by investing in both AB Volvo and Cint Group 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 Cint Group into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between AB Volvo and Cint Group AB, you can compare the effects of market volatilities on AB Volvo and Cint Group 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 Cint Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of AB Volvo and Cint Group.
Diversification Opportunities for AB Volvo and Cint Group
0.69 | Correlation Coefficient |
Poor diversification
The 3 months correlation between VOLV-A and Cint is 0.69. Overlapping area represents the amount of risk that can be diversified away by holding AB Volvo and Cint Group AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cint Group 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 Cint Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cint Group AB has no effect on the direction of AB Volvo i.e., AB Volvo and Cint Group go up and down completely randomly.
Pair Corralation between AB Volvo and Cint Group
Assuming the 90 days trading horizon AB Volvo is expected to under-perform the Cint Group. But the stock apears to be less risky and, when comparing its historical volatility, AB Volvo is 2.61 times less risky than Cint Group. The stock trades about -0.03 of its potential returns per unit of risk. The Cint Group AB is currently generating about -0.01 of returns per unit of risk over similar time horizon. If you would invest 1,488 in Cint Group AB on August 28, 2024 and sell it today you would lose (198.00) from holding Cint Group AB or give up 13.31% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
AB Volvo vs. Cint Group AB
Performance |
| Timeline |
| AB Volvo |
| Cint Group AB |
AB Volvo and Cint Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with AB Volvo and Cint Group
The main advantage of trading using opposite AB Volvo and Cint Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AB Volvo position performs unexpectedly, Cint Group 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 Cint Group will offset losses from the drop in Cint Group's long position.| AB Volvo vs. Truecaller AB | AB Volvo vs. Hexatronic Group AB | AB Volvo vs. NCAB Group | AB Volvo vs. Troax Group 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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
Other Complementary Tools
| Share Portfolio Track or share privately all of your investments from the convenience of any device | |
| Sectors List of equity sectors categorizing publicly traded companies based on their primary business activities | |
| Portfolio Suggestion Get suggestions outside of your existing asset allocation including your own model portfolios | |
| Balance Of Power Check stock momentum by analyzing Balance Of Power indicator and other technical ratios | |
| Portfolio Anywhere Track or share privately all of your investments from the convenience of any device |