Correlation Between SVENSKA AEROGEL and COPLAND ROAD

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

By analyzing existing cross correlation between SVENSKA AEROGEL HOLDING and COPLAND ROAD CAPITAL, you can compare the effects of market volatilities on SVENSKA AEROGEL and COPLAND ROAD 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 SVENSKA AEROGEL with a short position of COPLAND ROAD. Check out your portfolio center. Please also check ongoing floating volatility patterns of SVENSKA AEROGEL and COPLAND ROAD.

Diversification Opportunities for SVENSKA AEROGEL and COPLAND ROAD

0.2

Correlation Coefficient

SVENSKA AEROGEL  COPLAND ROAD

Modest diversification

The 3 months correlation between SVENSKA and COPLAND is 0.2. Overlapping area represents the amount of risk that can be diversified away by holding SVENSKA AEROGEL HOLDING and COPLAND ROAD CAPITAL in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on COPLAND ROAD CAPITAL and SVENSKA AEROGEL 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 SVENSKA AEROGEL HOLDING are associated (or correlated) with COPLAND ROAD. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of COPLAND ROAD CAPITAL has no effect on the direction of SVENSKA AEROGEL i.e., SVENSKA AEROGEL and COPLAND ROAD go up and down completely randomly.

Pair Corralation between SVENSKA AEROGEL and COPLAND ROAD

Assuming the 90 days horizon SVENSKA AEROGEL is expected to generate 1174.11 times less return on investment than COPLAND ROAD. In addition to that, SVENSKA AEROGEL is 1.93 times more volatile than COPLAND ROAD CAPITAL. It trades about 0.0 of its total potential returns per unit of risk. COPLAND ROAD CAPITAL is currently generating about 0.27 per unit of volatility. If you would invest  4,435  in COPLAND ROAD CAPITAL on October 23, 2024 and sell it today you would earn a total of  755.00  from holding COPLAND ROAD CAPITAL or generate 17.02% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	93.75%
Values	Daily Returns

SVENSKA AEROGEL HOLDING  vs.  COPLAND ROAD CAPITAL

SVENSKA AEROGEL HOLDING

Risk-Adjusted Performance

25 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in SVENSKA AEROGEL HOLDING are ranked lower than 25 (%) of all global equities and portfolios over the last 90 days. Despite nearly uncertain basic indicators, SVENSKA AEROGEL reported solid returns over the last few months and may actually be approaching a breakup point.

COPLAND ROAD CAPITAL

Risk-Adjusted Performance

15 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in COPLAND ROAD CAPITAL are ranked lower than 15 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, COPLAND ROAD reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with SVENSKA AEROGEL and COPLAND ROAD

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

The idea behind SVENSKA AEROGEL HOLDING and COPLAND ROAD CAPITAL 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 Portfolio Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.