Correlation Between Swedish Stirling and Metacon AB
Can any of the company-specific risk be diversified away by investing in both Swedish Stirling and Metacon AB 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 Swedish Stirling and Metacon AB into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Swedish Stirling AB and Metacon AB, you can compare the effects of market volatilities on Swedish Stirling and Metacon AB 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 Swedish Stirling with a short position of Metacon AB. Check out your portfolio center. Please also check ongoing floating volatility patterns of Swedish Stirling and Metacon AB.
Diversification Opportunities for Swedish Stirling and Metacon AB
-0.42 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Swedish and Metacon is -0.42. Overlapping area represents the amount of risk that can be diversified away by holding Swedish Stirling AB and Metacon AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Metacon AB and Swedish Stirling 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 Swedish Stirling AB are associated (or correlated) with Metacon AB. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Metacon AB has no effect on the direction of Swedish Stirling i.e., Swedish Stirling and Metacon AB go up and down completely randomly.
Pair Corralation between Swedish Stirling and Metacon AB
Assuming the 90 days trading horizon Swedish Stirling AB is expected to under-perform the Metacon AB. In addition to that, Swedish Stirling is 2.17 times more volatile than Metacon AB. It trades about -0.03 of its total potential returns per unit of risk. Metacon AB is currently generating about 0.0 per unit of volatility. If you would invest 149.00 in Metacon AB on March 6, 2024 and sell it today you would lose (88.00) from holding Metacon AB or give up 59.06% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 88.02% |
| Values | Daily Returns |
Swedish Stirling AB vs. Metacon AB
Performance |
| Timeline |
| Swedish Stirling |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Metacon AB |
Swedish Stirling and Metacon AB Volatility Contrast
Predicted Return Density |
| Returns |