Correlation Between Advenica and Awardit AB

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

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

Diversification Opportunities for Advenica and Awardit AB

0.29

Correlation Coefficient

Advenica  Awardit AB

Modest diversification

The 3 months correlation between Advenica and Awardit is 0.29. Overlapping area represents the amount of risk that can be diversified away by holding Advenica AB and Awardit AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Awardit AB and Advenica 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 Advenica AB are associated (or correlated) with Awardit AB. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Awardit AB has no effect on the direction of Advenica i.e., Advenica and Awardit AB go up and down completely randomly.

Pair Corralation between Advenica and Awardit AB

Assuming the 90 days trading horizon Advenica AB is expected to generate 2.29 times more return on investment than Awardit AB. However, Advenica is 2.29 times more volatile than Awardit AB. It trades about 0.16 of its potential returns per unit of risk. Awardit AB is currently generating about -0.04 per unit of risk. If you would invest  970.00  in Advenica AB on December 2, 2024 and sell it today you would earn a total of  380.00  from holding Advenica AB or generate 39.18% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

Advenica AB  vs.  Awardit AB

Advenica AB

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Advenica AB are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, Advenica unveiled solid returns over the last few months and may actually be approaching a breakup point.

Awardit AB

Risk-Adjusted Performance

Very Weak

Over the last 90 days Awardit AB has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, Awardit AB is not utilizing all of its potentials. The newest stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with Advenica and Awardit AB

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

The idea behind Advenica AB and Awardit AB 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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.