Correlation Between AVTECH Sweden and 24SevenOffice Scandinavia

Can any of the company-specific risk be diversified away by investing in both AVTECH Sweden and 24SevenOffice Scandinavia 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 AVTECH Sweden and 24SevenOffice Scandinavia into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between AVTECH Sweden AB and 24SevenOffice Scandinavia AB, you can compare the effects of market volatilities on AVTECH Sweden and 24SevenOffice Scandinavia 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 AVTECH Sweden with a short position of 24SevenOffice Scandinavia. Check out your portfolio center. Please also check ongoing floating volatility patterns of AVTECH Sweden and 24SevenOffice Scandinavia.

Diversification Opportunities for AVTECH Sweden and 24SevenOffice Scandinavia

0.51

Correlation Coefficient

AVTECH Sweden  24SevenOffice Scandinavia

Very weak diversification

The 3 months correlation between AVTECH and 24SevenOffice is 0.51. Overlapping area represents the amount of risk that can be diversified away by holding AVTECH Sweden AB and 24SevenOffice Scandinavia AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on 24SevenOffice Scandinavia and AVTECH Sweden 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 AVTECH Sweden AB are associated (or correlated) with 24SevenOffice Scandinavia. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of 24SevenOffice Scandinavia has no effect on the direction of AVTECH Sweden i.e., AVTECH Sweden and 24SevenOffice Scandinavia go up and down completely randomly.

Pair Corralation between AVTECH Sweden and 24SevenOffice Scandinavia

Assuming the 90 days trading horizon AVTECH Sweden AB is expected to generate 1.02 times more return on investment than 24SevenOffice Scandinavia. However, AVTECH Sweden is 1.02 times more volatile than 24SevenOffice Scandinavia AB. It trades about 0.2 of its potential returns per unit of risk. 24SevenOffice Scandinavia AB is currently generating about 0.07 per unit of risk. If you would invest  389.00  in AVTECH Sweden AB on December 1, 2024 and sell it today you would earn a total of  353.00  from holding AVTECH Sweden AB or generate 90.75% return on investment over 90 days.

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

AVTECH Sweden AB  vs.  24SevenOffice Scandinavia AB

AVTECH Sweden AB

Risk-Adjusted Performance

Good

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

24SevenOffice Scandinavia

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in 24SevenOffice Scandinavia AB are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, 24SevenOffice Scandinavia unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with AVTECH Sweden and 24SevenOffice Scandinavia

The main advantage of trading using opposite AVTECH Sweden and 24SevenOffice Scandinavia positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AVTECH Sweden position performs unexpectedly, 24SevenOffice Scandinavia 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 24SevenOffice Scandinavia will offset losses from the drop in 24SevenOffice Scandinavia's long position.

The idea behind AVTECH Sweden AB and 24SevenOffice Scandinavia 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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..