Correlation Between AB Volvo and Nanexa AB
Can any of the company-specific risk be diversified away by investing in both AB Volvo and Nanexa 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 Nanexa 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 Nanexa AB, you can compare the effects of market volatilities on AB Volvo and Nanexa 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 Nanexa AB. Check out your portfolio center. Please also check ongoing floating volatility patterns of AB Volvo and Nanexa AB.
Diversification Opportunities for AB Volvo and Nanexa AB
Excellent diversification
The 3 months correlation between VOLV-A and Nanexa is -0.63. Overlapping area represents the amount of risk that can be diversified away by holding AB Volvo and Nanexa AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nanexa 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 Nanexa AB. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nanexa AB has no effect on the direction of AB Volvo i.e., AB Volvo and Nanexa AB go up and down completely randomly.
Pair Corralation between AB Volvo and Nanexa AB
Assuming the 90 days trading horizon AB Volvo is expected to generate 0.31 times more return on investment than Nanexa AB. However, AB Volvo is 3.19 times less risky than Nanexa AB. It trades about 0.02 of its potential returns per unit of risk. Nanexa AB is currently generating about -0.06 per unit of risk. If you would invest 27,160 in AB Volvo on August 25, 2024 and sell it today you would earn a total of 140.00 from holding AB Volvo or generate 0.52% 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. Nanexa AB
Performance |
| Timeline |
| AB Volvo |
| Nanexa AB |
AB Volvo and Nanexa AB Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with AB Volvo and Nanexa AB
The main advantage of trading using opposite AB Volvo and Nanexa AB positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AB Volvo position performs unexpectedly, Nanexa 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 Nanexa AB will offset losses from the drop in Nanexa 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 |
| Nanexa AB vs. Corline Biomedical AB | Nanexa AB vs. Klaria Pharma Holding | Nanexa AB vs. Mendus AB | Nanexa AB vs. Alzinova 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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..
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