Correlation Between Anoto Group and Vitrolife

Can any of the company-specific risk be diversified away by investing in both Anoto Group and Vitrolife 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 Vitrolife 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 Vitrolife AB, you can compare the effects of market volatilities on Anoto Group and Vitrolife 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 Vitrolife. Check out your portfolio center. Please also check ongoing floating volatility patterns of Anoto Group and Vitrolife.

Diversification Opportunities for Anoto Group and Vitrolife

0.23

Correlation Coefficient

Anoto Group  Vitrolife

Modest diversification

The 3 months correlation between Anoto and Vitrolife is 0.23. Overlapping area represents the amount of risk that can be diversified away by holding Anoto Group AB and Vitrolife AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Vitrolife 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 Vitrolife. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Vitrolife AB has no effect on the direction of Anoto Group i.e., Anoto Group and Vitrolife go up and down completely randomly.

Pair Corralation between Anoto Group and Vitrolife

Assuming the 90 days trading horizon Anoto Group AB is expected to under-perform the Vitrolife. In addition to that, Anoto Group is 4.25 times more volatile than Vitrolife AB. It trades about -0.02 of its total potential returns per unit of risk. Vitrolife AB is currently generating about -0.08 per unit of volatility. If you would invest  22,520  in Vitrolife AB on December 2, 2024 and sell it today you would lose (2,820) from holding Vitrolife AB or give up 12.52% of portfolio value over 90 days.

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

Anoto Group AB  vs.  Vitrolife 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.

Vitrolife AB

Risk-Adjusted Performance

Very Weak

Over the last 90 days Vitrolife AB has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest uncertain performance, the Stock's basic indicators remain stable and the newest uproar on Wall Street may also be a sign of mid-term gains for the firm private investors.

Pair Trading with Anoto Group and Vitrolife

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

The idea behind Anoto Group AB and Vitrolife 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.