Correlation Between SAXLUND GROUP and MAVEN WIRELESS

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

By analyzing existing cross correlation between SAXLUND GROUP AB and MAVEN WIRELESS SWEDEN, you can compare the effects of market volatilities on SAXLUND GROUP and MAVEN WIRELESS 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 SAXLUND GROUP with a short position of MAVEN WIRELESS. Check out your portfolio center. Please also check ongoing floating volatility patterns of SAXLUND GROUP and MAVEN WIRELESS.

Diversification Opportunities for SAXLUND GROUP and MAVEN WIRELESS

0.53

Correlation Coefficient

SAXLUND GROUP  MAVEN WIRELESS

Very weak diversification

The 3 months correlation between SAXLUND and MAVEN is 0.53. Overlapping area represents the amount of risk that can be diversified away by holding SAXLUND GROUP AB and MAVEN WIRELESS SWEDEN in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MAVEN WIRELESS SWEDEN and SAXLUND GROUP 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 SAXLUND GROUP AB are associated (or correlated) with MAVEN WIRELESS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MAVEN WIRELESS SWEDEN has no effect on the direction of SAXLUND GROUP i.e., SAXLUND GROUP and MAVEN WIRELESS go up and down completely randomly.

Pair Corralation between SAXLUND GROUP and MAVEN WIRELESS

Assuming the 90 days horizon SAXLUND GROUP AB is expected to generate 18.8 times more return on investment than MAVEN WIRELESS. However, SAXLUND GROUP is 18.8 times more volatile than MAVEN WIRELESS SWEDEN. It trades about 0.15 of its potential returns per unit of risk. MAVEN WIRELESS SWEDEN is currently generating about -0.02 per unit of risk. If you would invest  60.00  in SAXLUND GROUP AB on October 21, 2024 and sell it today you would lose (40.00) from holding SAXLUND GROUP AB or give up 66.67% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	98.36%
Values	Daily Returns

SAXLUND GROUP AB  vs.  MAVEN WIRELESS SWEDEN

SAXLUND GROUP AB

Risk-Adjusted Performance

12 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in SAXLUND GROUP AB are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, SAXLUND GROUP reported solid returns over the last few months and may actually be approaching a breakup point.

MAVEN WIRELESS SWEDEN

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days MAVEN WIRELESS SWEDEN has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, MAVEN WIRELESS is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with SAXLUND GROUP and MAVEN WIRELESS

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

The idea behind SAXLUND GROUP AB and MAVEN WIRELESS SWEDEN 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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.