Correlation Between ALBIS LEASING and Indutrade

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

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

Diversification Opportunities for ALBIS LEASING and Indutrade

-0.68

Correlation Coefficient

ALBIS LEASING  Indutrade

Excellent diversification

The 3 months correlation between ALBIS and Indutrade is -0.68. Overlapping area represents the amount of risk that can be diversified away by holding ALBIS LEASING AG and Indutrade AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Indutrade AB and ALBIS LEASING 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 ALBIS LEASING AG are associated (or correlated) with Indutrade. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Indutrade AB has no effect on the direction of ALBIS LEASING i.e., ALBIS LEASING and Indutrade go up and down completely randomly.

Pair Corralation between ALBIS LEASING and Indutrade

Assuming the 90 days trading horizon ALBIS LEASING AG is expected to generate 0.5 times more return on investment than Indutrade. However, ALBIS LEASING AG is 2.01 times less risky than Indutrade. It trades about 0.12 of its potential returns per unit of risk. Indutrade AB is currently generating about 0.06 per unit of risk. If you would invest  205.00  in ALBIS LEASING AG on September 28, 2024 and sell it today you would earn a total of  73.00  from holding ALBIS LEASING AG or generate 35.61% return on investment over 90 days.

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

ALBIS LEASING AG  vs.  Indutrade AB

ALBIS LEASING AG

Risk-Adjusted Performance

7 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in ALBIS LEASING AG are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable technical and fundamental indicators, ALBIS LEASING is not utilizing all of its potentials. The newest stock price uproar, may contribute to short-horizon losses for the private investors.

Indutrade AB

Risk-Adjusted Performance

0 of 100

Very Weak

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

Pair Trading with ALBIS LEASING and Indutrade

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

The idea behind ALBIS LEASING AG and Indutrade 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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .