Correlation Between Joint Stock and AB Electrolux
Can any of the company-specific risk be diversified away by investing in both Joint Stock and AB Electrolux 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 Joint Stock and AB Electrolux into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Joint Stock and AB Electrolux, you can compare the effects of market volatilities on Joint Stock and AB Electrolux 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 Joint Stock with a short position of AB Electrolux. Check out your portfolio center. Please also check ongoing floating volatility patterns of Joint Stock and AB Electrolux.
Diversification Opportunities for Joint Stock and AB Electrolux
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Joint and ELUXF is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Joint Stock and AB Electrolux in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AB Electrolux and Joint Stock 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 Joint Stock are associated (or correlated) with AB Electrolux. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AB Electrolux has no effect on the direction of Joint Stock i.e., Joint Stock and AB Electrolux go up and down completely randomly.
Pair Corralation between Joint Stock and AB Electrolux
If you would invest (100.00) in AB Electrolux on February 2, 2024 and sell it today you would earn a total of 100.00 from holding AB Electrolux or generate -100.0% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Flat |
Strength | Insignificant |
Accuracy | 0.0% |
Values | Daily Returns |
Joint Stock vs. AB Electrolux
Performance |
Timeline |
Joint Stock |
AB Electrolux |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Joint Stock and AB Electrolux Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Joint Stock and AB Electrolux
The main advantage of trading using opposite Joint Stock and AB Electrolux positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Joint Stock position performs unexpectedly, AB Electrolux 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 AB Electrolux will offset losses from the drop in AB Electrolux's long position.Joint Stock vs. Unity Software | Joint Stock vs. Daily Journal Corp | Joint Stock vs. C3 Ai Inc | Joint Stock vs. Blackline |
AB Electrolux vs. NL Industries | AB Electrolux vs. Park Electrochemical | AB Electrolux vs. Sensient Technologies | AB Electrolux vs. Teleflex Incorporated |
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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.
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