Correlation Between Alimak Hek and Nederman Holding

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

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

Diversification Opportunities for Alimak Hek and Nederman Holding

-0.02

Correlation Coefficient

Alimak Hek  Nederman Holding

Good diversification

The 3 months correlation between Alimak and Nederman is -0.02. Overlapping area represents the amount of risk that can be diversified away by holding Alimak Hek Group and Nederman Holding AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nederman Holding and Alimak Hek 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 Alimak Hek Group are associated (or correlated) with Nederman Holding. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nederman Holding has no effect on the direction of Alimak Hek i.e., Alimak Hek and Nederman Holding go up and down completely randomly.

Pair Corralation between Alimak Hek and Nederman Holding

Assuming the 90 days trading horizon Alimak Hek Group is expected to generate 0.88 times more return on investment than Nederman Holding. However, Alimak Hek Group is 1.14 times less risky than Nederman Holding. It trades about 0.0 of its potential returns per unit of risk. Nederman Holding AB is currently generating about -0.06 per unit of risk. If you would invest  12,000  in Alimak Hek Group on October 5, 2024 and sell it today you would lose (20.00) from holding Alimak Hek Group or give up 0.17% of portfolio value over 90 days.

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

Alimak Hek Group  vs.  Nederman Holding AB

Alimak Hek Group

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Alimak Hek Group are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively weak basic indicators, Alimak Hek may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Nederman Holding

Risk-Adjusted Performance

0 of 100

Very Weak

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

Pair Trading with Alimak Hek and Nederman Holding

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

The idea behind Alimak Hek Group and Nederman Holding 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.

Check out your portfolio center.

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 Portfolio Anywhere module to track or share privately all of your investments from the convenience of any device.