Correlation Between Alm Brand and Scandinavian Investment

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

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

Diversification Opportunities for Alm Brand and Scandinavian Investment

0.0

Correlation Coefficient

Alm Brand  Scandinavian Investment

Pay attention - limited upside

The 3 months correlation between Alm and Scandinavian is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Alm Brand and Scandinavian Investment Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Scandinavian Investment and Alm Brand 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 Alm Brand are associated (or correlated) with Scandinavian Investment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Scandinavian Investment has no effect on the direction of Alm Brand i.e., Alm Brand and Scandinavian Investment go up and down completely randomly.

Pair Corralation between Alm Brand and Scandinavian Investment

If you would invest  1,221  in Alm Brand on September 4, 2024 and sell it today you would earn a total of  184.00  from holding Alm Brand or generate 15.07% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	1.54%
Values	Daily Returns

Alm Brand  vs.  Scandinavian Investment Group

Alm Brand

Risk-Adjusted Performance

15 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Alm Brand are ranked lower than 15 (%) of all global equities and portfolios over the last 90 days. In spite of very unfluctuating basic indicators, Alm Brand displayed solid returns over the last few months and may actually be approaching a breakup point.

Scandinavian Investment

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Scandinavian Investment Group has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy technical and fundamental indicators, Scandinavian Investment is not utilizing all of its potentials. The current stock price disarray, may contribute to short-term losses for the investors.

Pair Trading with Alm Brand and Scandinavian Investment

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

The idea behind Alm Brand and Scandinavian Investment Group 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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.