Correlation Between SAXLUND GROUP and CARSALES

Can any of the company-specific risk be diversified away by investing in both SAXLUND GROUP and CARSALES 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 CARSALES 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 CARSALESCOM, you can compare the effects of market volatilities on SAXLUND GROUP and CARSALES 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 CARSALES. Check out your portfolio center. Please also check ongoing floating volatility patterns of SAXLUND GROUP and CARSALES.

Diversification Opportunities for SAXLUND GROUP and CARSALES

-0.2

Correlation Coefficient

SAXLUND GROUP  CARSALES

Good diversification

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

Pair Corralation between SAXLUND GROUP and CARSALES

Assuming the 90 days horizon SAXLUND GROUP AB is expected to generate 96.56 times more return on investment than CARSALES. However, SAXLUND GROUP is 96.56 times more volatile than CARSALESCOM. It trades about 0.2 of its potential returns per unit of risk. CARSALESCOM is currently generating about 0.07 per unit of risk. If you would invest  860.00  in SAXLUND GROUP AB on October 3, 2024 and sell it today you would lose (840.00) from holding SAXLUND GROUP AB or give up 97.67% of portfolio value over 90 days.

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

SAXLUND GROUP AB  vs.  CARSALESCOM

SAXLUND GROUP AB

Risk-Adjusted Performance

15 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in SAXLUND GROUP AB are ranked lower than 15 (%) 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.

CARSALESCOM

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days CARSALESCOM has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound basic indicators, CARSALES is not utilizing all of its potentials. The newest stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with SAXLUND GROUP and CARSALES

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

The idea behind SAXLUND GROUP AB and CARSALESCOM 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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.