Correlation Between AB Volvo and Logistea
Can any of the company-specific risk be diversified away by investing in both AB Volvo and Logistea 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 Logistea into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between AB Volvo and Logistea AB Series, you can compare the effects of market volatilities on AB Volvo and Logistea 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 Logistea. Check out your portfolio center. Please also check ongoing floating volatility patterns of AB Volvo and Logistea.
Diversification Opportunities for AB Volvo and Logistea
Very good diversification
The 3 months correlation between VOLV-A and Logistea is -0.39. Overlapping area represents the amount of risk that can be diversified away by holding AB Volvo and Logistea AB Series in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Logistea AB Series 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 Logistea. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Logistea AB Series has no effect on the direction of AB Volvo i.e., AB Volvo and Logistea go up and down completely randomly.
Pair Corralation between AB Volvo and Logistea
Assuming the 90 days trading horizon AB Volvo is expected to under-perform the Logistea. But the stock apears to be less risky and, when comparing its historical volatility, AB Volvo is 1.57 times less risky than Logistea. The stock trades about -0.02 of its potential returns per unit of risk. The Logistea AB Series is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 1,488 in Logistea AB Series on September 1, 2024 and sell it today you would earn a total of 108.00 from holding Logistea AB Series or generate 7.26% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 99.22% |
| Values | Daily Returns |
AB Volvo vs. Logistea AB Series
Performance |
| Timeline |
| AB Volvo |
| Logistea AB Series |
AB Volvo and Logistea Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with AB Volvo and Logistea
The main advantage of trading using opposite AB Volvo and Logistea positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AB Volvo position performs unexpectedly, Logistea 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 Logistea will offset losses from the drop in Logistea'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 |
| Logistea vs. Logistea A | Logistea vs. KlaraBo Sverige AB | Logistea vs. Hexatronic Group AB | Logistea vs. K Fast Holding 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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.
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