Correlation Between AB Volvo and OXE Marine
Can any of the company-specific risk be diversified away by investing in both AB Volvo and OXE Marine 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 OXE Marine into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between AB Volvo and OXE Marine AB, you can compare the effects of market volatilities on AB Volvo and OXE Marine 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 OXE Marine. Check out your portfolio center. Please also check ongoing floating volatility patterns of AB Volvo and OXE Marine.
Diversification Opportunities for AB Volvo and OXE Marine
-0.42 | Correlation Coefficient |
Very good diversification
The 3 months correlation between VOLV-A and OXE is -0.42. Overlapping area represents the amount of risk that can be diversified away by holding AB Volvo and OXE Marine AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on OXE Marine 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 OXE Marine. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of OXE Marine AB has no effect on the direction of AB Volvo i.e., AB Volvo and OXE Marine go up and down completely randomly.
Pair Corralation between AB Volvo and OXE Marine
Assuming the 90 days trading horizon AB Volvo is expected to under-perform the OXE Marine. But the stock apears to be less risky and, when comparing its historical volatility, AB Volvo is 3.54 times less risky than OXE Marine. The stock trades about -0.12 of its potential returns per unit of risk. The OXE Marine AB is currently generating about -0.03 of returns per unit of risk over similar time horizon. If you would invest 43.00 in OXE Marine AB on August 28, 2024 and sell it today you would lose (3.00) from holding OXE Marine AB or give up 6.98% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
AB Volvo vs. OXE Marine AB
Performance |
| Timeline |
| AB Volvo |
| OXE Marine AB |
AB Volvo and OXE Marine Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with AB Volvo and OXE Marine
The main advantage of trading using opposite AB Volvo and OXE Marine positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AB Volvo position performs unexpectedly, OXE Marine 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 OXE Marine will offset losses from the drop in OXE Marine's long position.| AB Volvo vs. Truecaller AB | AB Volvo vs. Hexatronic Group AB | AB Volvo vs. NCAB Group | AB Volvo vs. Troax Group AB |
| OXE Marine vs. Episurf Medical AB | OXE Marine vs. Online Brands Nordic | OXE Marine vs. Scandinavian Enviro Systems | OXE Marine vs. Acconeer 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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.
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