Correlation Between EEducation Albert and Clean Motion

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

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

Diversification Opportunities for EEducation Albert and Clean Motion

0.55

Correlation Coefficient

EEducation Albert  Clean Motion

Very weak diversification

The 3 months correlation between EEducation and Clean is 0.55. Overlapping area represents the amount of risk that can be diversified away by holding eEducation Albert AB and Clean Motion AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Clean Motion AB and EEducation Albert 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 eEducation Albert AB are associated (or correlated) with Clean Motion. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Clean Motion AB has no effect on the direction of EEducation Albert i.e., EEducation Albert and Clean Motion go up and down completely randomly.

Pair Corralation between EEducation Albert and Clean Motion

Assuming the 90 days trading horizon eEducation Albert AB is expected to under-perform the Clean Motion. But the stock apears to be less risky and, when comparing its historical volatility, eEducation Albert AB is 1.54 times less risky than Clean Motion. The stock trades about -0.06 of its potential returns per unit of risk. The Clean Motion AB is currently generating about -0.02 of returns per unit of risk over similar time horizon. If you would invest  102.00  in Clean Motion AB on December 2, 2024 and sell it today you would lose (76.00) from holding Clean Motion AB or give up 74.51% of portfolio value over 90 days.

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

eEducation Albert AB  vs.  Clean Motion AB

eEducation Albert

Risk-Adjusted Performance

Very Weak

Over the last 90 days eEducation Albert 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 fundamental drivers remain somewhat strong which may send shares a bit higher in April 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Clean Motion AB

Risk-Adjusted Performance

Very Weak

Over the last 90 days Clean Motion 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 April 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Pair Trading with EEducation Albert and Clean Motion

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

The idea behind eEducation Albert AB and Clean Motion 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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.