Correlation Between AB Volvo and Cell Impact
Can any of the company-specific risk be diversified away by investing in both AB Volvo and Cell Impact 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 Cell Impact into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between AB Volvo and Cell Impact AB, you can compare the effects of market volatilities on AB Volvo and Cell Impact 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 Cell Impact. Check out your portfolio center. Please also check ongoing floating volatility patterns of AB Volvo and Cell Impact.
Diversification Opportunities for AB Volvo and Cell Impact
-0.38 | Correlation Coefficient |
Very good diversification
The 3 months correlation between VOLV-B and Cell is -0.38. Overlapping area represents the amount of risk that can be diversified away by holding AB Volvo and Cell Impact AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cell Impact 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 Cell Impact. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cell Impact AB has no effect on the direction of AB Volvo i.e., AB Volvo and Cell Impact go up and down completely randomly.
Pair Corralation between AB Volvo and Cell Impact
Assuming the 90 days trading horizon AB Volvo is expected to generate 0.17 times more return on investment than Cell Impact. However, AB Volvo is 5.85 times less risky than Cell Impact. It trades about 0.05 of its potential returns per unit of risk. Cell Impact AB is currently generating about 0.0 per unit of risk. If you would invest 23,751 in AB Volvo on August 26, 2024 and sell it today you would earn a total of 3,399 from holding AB Volvo or generate 14.31% 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. Cell Impact AB
Performance |
| Timeline |
| AB Volvo |
| Cell Impact AB |
AB Volvo and Cell Impact Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with AB Volvo and Cell Impact
The main advantage of trading using opposite AB Volvo and Cell Impact positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AB Volvo position performs unexpectedly, Cell Impact 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 Cell Impact will offset losses from the drop in Cell Impact's long position.| AB Volvo vs. AstraZeneca PLC | AB Volvo vs. H M Hennes | AB Volvo vs. Telefonaktiebolaget LM Ericsson | AB Volvo vs. Investor AB ser |
| Cell Impact vs. AstraZeneca PLC | Cell Impact vs. Investor AB ser | Cell Impact vs. Investor AB ser | Cell Impact vs. Atlas Copco 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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.
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