Correlation Between Anoto Group and Diadrom Holding

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

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

Diversification Opportunities for Anoto Group and Diadrom Holding

-0.04

Correlation Coefficient

Anoto Group  Diadrom Holding

Good diversification

The 3 months correlation between Anoto and Diadrom is -0.04. Overlapping area represents the amount of risk that can be diversified away by holding Anoto Group AB and Diadrom Holding AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Diadrom Holding AB and Anoto Group 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 Anoto Group AB are associated (or correlated) with Diadrom Holding. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Diadrom Holding AB has no effect on the direction of Anoto Group i.e., Anoto Group and Diadrom Holding go up and down completely randomly.

Pair Corralation between Anoto Group and Diadrom Holding

Assuming the 90 days trading horizon Anoto Group AB is expected to under-perform the Diadrom Holding. In addition to that, Anoto Group is 3.56 times more volatile than Diadrom Holding AB. It trades about -0.05 of its total potential returns per unit of risk. Diadrom Holding AB is currently generating about 0.1 per unit of volatility. If you would invest  680.00  in Diadrom Holding AB on December 30, 2024 and sell it today you would earn a total of  128.00  from holding Diadrom Holding AB or generate 18.82% return on investment over 90 days.

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

Anoto Group AB  vs.  Diadrom Holding AB

Anoto Group AB

Risk-Adjusted Performance

Very Weak

Over the last 90 days Anoto Group 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.

Diadrom Holding AB

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Diadrom Holding AB are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, Diadrom Holding unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Anoto Group and Diadrom Holding

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

The idea behind Anoto Group AB and Diadrom 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.

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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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.