Correlation Between AB Volvo and NAXS Nordic
Can any of the company-specific risk be diversified away by investing in both AB Volvo and NAXS Nordic 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 NAXS Nordic into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between AB Volvo and NAXS Nordic Access, you can compare the effects of market volatilities on AB Volvo and NAXS Nordic 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 NAXS Nordic. Check out your portfolio center. Please also check ongoing floating volatility patterns of AB Volvo and NAXS Nordic.
Diversification Opportunities for AB Volvo and NAXS Nordic
-0.35 | Correlation Coefficient |
Very good diversification
The 3 months correlation between VOLV-A and NAXS is -0.35. Overlapping area represents the amount of risk that can be diversified away by holding AB Volvo and NAXS Nordic Access in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NAXS Nordic Access 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 NAXS Nordic. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NAXS Nordic Access has no effect on the direction of AB Volvo i.e., AB Volvo and NAXS Nordic go up and down completely randomly.
Pair Corralation between AB Volvo and NAXS Nordic
Assuming the 90 days trading horizon AB Volvo is expected to generate 0.99 times more return on investment than NAXS Nordic. However, AB Volvo is 1.01 times less risky than NAXS Nordic. It trades about 0.06 of its potential returns per unit of risk. NAXS Nordic Access is currently generating about 0.0 per unit of risk. If you would invest 19,492 in AB Volvo on September 3, 2024 and sell it today you would earn a total of 7,808 from holding AB Volvo or generate 40.06% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
AB Volvo vs. NAXS Nordic Access
Performance |
| Timeline |
| AB Volvo |
| NAXS Nordic Access |
AB Volvo and NAXS Nordic Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with AB Volvo and NAXS Nordic
The main advantage of trading using opposite AB Volvo and NAXS Nordic positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AB Volvo position performs unexpectedly, NAXS Nordic 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 NAXS Nordic will offset losses from the drop in NAXS Nordic'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 |
| NAXS Nordic vs. Bure Equity AB | NAXS Nordic vs. Creades AB | NAXS Nordic vs. L E Lundbergfretagen | NAXS Nordic vs. Industrivarden AB ser |
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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.
Other Complementary Tools
| Transaction History View history of all your transactions and understand their impact on performance | |
| Fundamental Analysis View fundamental data based on most recent published financial statements | |
| Idea Optimizer Use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio | |
| Sync Your Broker Sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors. | |
| Content Syndication Quickly integrate customizable finance content to your own investment portal |