Correlation Between AB Volvo and Know IT
Can any of the company-specific risk be diversified away by investing in both AB Volvo and Know IT 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 Know IT into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between AB Volvo and Know IT AB, you can compare the effects of market volatilities on AB Volvo and Know IT 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 Know IT. Check out your portfolio center. Please also check ongoing floating volatility patterns of AB Volvo and Know IT.
Diversification Opportunities for AB Volvo and Know IT
Pay attention - limited upside
The 3 months correlation between VOLV-A and Know is -0.71. Overlapping area represents the amount of risk that can be diversified away by holding AB Volvo and Know IT AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Know IT 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 Know IT. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Know IT AB has no effect on the direction of AB Volvo i.e., AB Volvo and Know IT go up and down completely randomly.
Pair Corralation between AB Volvo and Know IT
Assuming the 90 days trading horizon AB Volvo is expected to under-perform the Know IT. In addition to that, AB Volvo is 1.01 times more volatile than Know IT AB. It trades about -0.06 of its total potential returns per unit of risk. Know IT AB is currently generating about 0.04 per unit of volatility. If you would invest 13,186 in Know IT AB on August 26, 2024 and sell it today you would earn a total of 154.00 from holding Know IT AB or generate 1.17% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
AB Volvo vs. Know IT AB
Performance |
| Timeline |
| AB Volvo |
| Know IT AB |
AB Volvo and Know IT Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with AB Volvo and Know IT
The main advantage of trading using opposite AB Volvo and Know IT positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AB Volvo position performs unexpectedly, Know IT 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 Know IT will offset losses from the drop in Know IT'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 |
| Know IT vs. Enea AB | Know IT vs. Lagercrantz Group AB | Know IT vs. Vitec Software Group | Know IT vs. Addnode 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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.
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