Correlation Between Arctic Blue and Genovis AB
Can any of the company-specific risk be diversified away by investing in both Arctic Blue and Genovis AB 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 Arctic Blue and Genovis AB into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Arctic Blue Beverages and Genovis AB, you can compare the effects of market volatilities on Arctic Blue and Genovis AB 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 Arctic Blue with a short position of Genovis AB. Check out your portfolio center. Please also check ongoing floating volatility patterns of Arctic Blue and Genovis AB.
Diversification Opportunities for Arctic Blue and Genovis AB
-0.31 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Arctic and Genovis is -0.31. Overlapping area represents the amount of risk that can be diversified away by holding Arctic Blue Beverages and Genovis AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Genovis AB and Arctic Blue 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 Arctic Blue Beverages are associated (or correlated) with Genovis AB. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Genovis AB has no effect on the direction of Arctic Blue i.e., Arctic Blue and Genovis AB go up and down completely randomly.
Pair Corralation between Arctic Blue and Genovis AB
Assuming the 90 days trading horizon Arctic Blue Beverages is expected to under-perform the Genovis AB. But the stock apears to be less risky and, when comparing its historical volatility, Arctic Blue Beverages is 1.34 times less risky than Genovis AB. The stock trades about -0.34 of its potential returns per unit of risk. The Genovis AB is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 2,280 in Genovis AB on September 15, 2024 and sell it today you would earn a total of 225.00 from holding Genovis AB or generate 9.87% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Insignificant |
Accuracy | 100.0% |
Values | Daily Returns |
Arctic Blue Beverages vs. Genovis AB
Performance |
Timeline |
Arctic Blue Beverages |
Genovis AB |
Arctic Blue and Genovis AB Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Arctic Blue and Genovis AB
The main advantage of trading using opposite Arctic Blue and Genovis AB positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Arctic Blue position performs unexpectedly, Genovis AB 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 Genovis AB will offset losses from the drop in Genovis AB's long position.Arctic Blue vs. Lundin Mining | ||
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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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.
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