Correlation Between Allfunds and Instalco Intressenter

Can any of the company-specific risk be diversified away by investing in both Allfunds and Instalco Intressenter 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 Allfunds and Instalco Intressenter into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Allfunds Group and Instalco Intressenter AB, you can compare the effects of market volatilities on Allfunds and Instalco Intressenter 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 Allfunds with a short position of Instalco Intressenter. Check out your portfolio center. Please also check ongoing floating volatility patterns of Allfunds and Instalco Intressenter.

Diversification Opportunities for Allfunds and Instalco Intressenter

0.15

Correlation Coefficient

Allfunds  Instalco Intressenter

Average diversification

The 3 months correlation between Allfunds and Instalco is 0.15. Overlapping area represents the amount of risk that can be diversified away by holding Allfunds Group and Instalco Intressenter AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Instalco Intressenter and Allfunds 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 Allfunds Group are associated (or correlated) with Instalco Intressenter. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Instalco Intressenter has no effect on the direction of Allfunds i.e., Allfunds and Instalco Intressenter go up and down completely randomly.

Pair Corralation between Allfunds and Instalco Intressenter

Assuming the 90 days trading horizon Allfunds Group is expected to under-perform the Instalco Intressenter. But the stock apears to be less risky and, when comparing its historical volatility, Allfunds Group is 1.08 times less risky than Instalco Intressenter. The stock trades about -0.09 of its potential returns per unit of risk. The Instalco Intressenter AB is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest  3,590  in Instalco Intressenter AB on February 2, 2024 and sell it today you would earn a total of  322.00  from holding Instalco Intressenter AB or generate 8.97% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Allfunds Group  vs.  Instalco Intressenter AB

Allfunds Group

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Allfunds Group has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest weak performance, the Stock's technical and fundamental indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the company investors.

Instalco Intressenter

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Instalco Intressenter AB has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, Instalco Intressenter is not utilizing all of its potentials. The newest stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Allfunds and Instalco Intressenter

The main advantage of trading using opposite Allfunds and Instalco Intressenter positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Allfunds position performs unexpectedly, Instalco Intressenter 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 Instalco Intressenter will offset losses from the drop in Instalco Intressenter's long position.

The idea behind Allfunds Group and Instalco Intressenter AB pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.