Correlation Between AB Volvo and Clas Ohlson
Can any of the company-specific risk be diversified away by investing in both AB Volvo and Clas Ohlson 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 Clas Ohlson into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between AB Volvo and Clas Ohlson AB, you can compare the effects of market volatilities on AB Volvo and Clas Ohlson 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 Clas Ohlson. Check out your portfolio center. Please also check ongoing floating volatility patterns of AB Volvo and Clas Ohlson.
Diversification Opportunities for AB Volvo and Clas Ohlson
0.52 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between VOLV-A and Clas is 0.52. Overlapping area represents the amount of risk that can be diversified away by holding AB Volvo and Clas Ohlson AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Clas Ohlson 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 Clas Ohlson. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Clas Ohlson AB has no effect on the direction of AB Volvo i.e., AB Volvo and Clas Ohlson go up and down completely randomly.
Pair Corralation between AB Volvo and Clas Ohlson
Assuming the 90 days trading horizon AB Volvo is expected to under-perform the Clas Ohlson. In addition to that, AB Volvo is 1.05 times more volatile than Clas Ohlson AB. It trades about -0.05 of its total potential returns per unit of risk. Clas Ohlson AB is currently generating about 0.34 per unit of volatility. If you would invest 17,510 in Clas Ohlson AB on September 1, 2024 and sell it today you would earn a total of 2,190 from holding Clas Ohlson AB or generate 12.51% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 95.65% |
| Values | Daily Returns |
AB Volvo vs. Clas Ohlson AB
Performance |
| Timeline |
| AB Volvo |
| Clas Ohlson AB |
AB Volvo and Clas Ohlson Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with AB Volvo and Clas Ohlson
The main advantage of trading using opposite AB Volvo and Clas Ohlson positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AB Volvo position performs unexpectedly, Clas Ohlson 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 Clas Ohlson will offset losses from the drop in Clas Ohlson'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 |
| Clas Ohlson vs. Tele2 AB | Clas Ohlson vs. Axfood AB | Clas Ohlson vs. Telia Company AB | Clas Ohlson vs. Byggmax 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 Portfolio Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.
Other Complementary Tools
| Stocks Directory Find actively traded stocks across global markets | |
| Bonds Directory Find actively traded corporate debentures issued by US companies | |
| Risk-Return Analysis View associations between returns expected from investment and the risk you assume | |
| Pattern Recognition Use different Pattern Recognition models to time the market across multiple global exchanges | |
| USA ETFs Find actively traded Exchange Traded Funds (ETF) in USA |