Correlation Between Afry AB and Instalco Intressenter

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

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

Diversification Opportunities for Afry AB and Instalco Intressenter

0.92

Correlation Coefficient

Afry AB  Instalco Intressenter

Almost no diversification

The 3 months correlation between Afry and Instalco is 0.92. Overlapping area represents the amount of risk that can be diversified away by holding Afry AB and Instalco Intressenter AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Instalco Intressenter and Afry AB 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 Afry AB are associated (or correlated) with Instalco Intressenter. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Instalco Intressenter has no effect on the direction of Afry AB i.e., Afry AB and Instalco Intressenter go up and down completely randomly.

Pair Corralation between Afry AB and Instalco Intressenter

Assuming the 90 days trading horizon Afry AB is expected to under-perform the Instalco Intressenter. But the stock apears to be less risky and, when comparing its historical volatility, Afry AB is 1.37 times less risky than Instalco Intressenter. The stock trades about 0.0 of its potential returns per unit of risk. The Instalco Intressenter AB is currently generating about 0.0 of returns per unit of risk over similar time horizon. If you would invest  3,888  in Instalco Intressenter AB on September 26, 2024 and sell it today you would lose (616.00) from holding Instalco Intressenter AB or give up 15.84% of portfolio value over 90 days.

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

Afry AB  vs.  Instalco Intressenter AB

Afry AB

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Afry AB has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of uncertain performance in the last few months, the Stock's basic indicators remain comparatively stable which may send shares a bit higher in January 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Instalco Intressenter

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Instalco Intressenter AB has generated negative risk-adjusted returns adding no value to investors with long positions. Despite uncertain performance in the last few months, the Stock's basic indicators remain somewhat strong which may send shares a bit higher in January 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Pair Trading with Afry AB and Instalco Intressenter

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

The idea behind Afry AB and Instalco Intressenter 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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.