Correlation Between AB Volvo and Resqunit
Can any of the company-specific risk be diversified away by investing in both AB Volvo and Resqunit 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 Resqunit into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between AB Volvo and Resqunit AB, you can compare the effects of market volatilities on AB Volvo and Resqunit 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 Resqunit. Check out your portfolio center. Please also check ongoing floating volatility patterns of AB Volvo and Resqunit.
Diversification Opportunities for AB Volvo and Resqunit
Very good diversification
The 3 months correlation between VOLV-A and Resqunit is -0.35. Overlapping area represents the amount of risk that can be diversified away by holding AB Volvo and Resqunit AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Resqunit 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 Resqunit. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Resqunit AB has no effect on the direction of AB Volvo i.e., AB Volvo and Resqunit go up and down completely randomly.
Pair Corralation between AB Volvo and Resqunit
Assuming the 90 days trading horizon AB Volvo is expected to generate 9.42 times less return on investment than Resqunit. But when comparing it to its historical volatility, AB Volvo is 14.06 times less risky than Resqunit. It trades about 0.06 of its potential returns per unit of risk. Resqunit AB is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 447.00 in Resqunit AB on September 4, 2024 and sell it today you would lose (427.00) from holding Resqunit AB or give up 95.53% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 99.8% |
| Values | Daily Returns |
AB Volvo vs. Resqunit AB
Performance |
| Timeline |
| AB Volvo |
| Resqunit AB |
AB Volvo and Resqunit Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with AB Volvo and Resqunit
The main advantage of trading using opposite AB Volvo and Resqunit positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AB Volvo position performs unexpectedly, Resqunit 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 Resqunit will offset losses from the drop in Resqunit'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 |
| Resqunit vs. ZAZZ Energy of | Resqunit vs. Triboron International AB | Resqunit vs. NCAB Group | Resqunit vs. Vimian 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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.
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