Correlation Between AVTECH Sweden and Genovis AB

Can any of the company-specific risk be diversified away by investing in both AVTECH Sweden 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 AVTECH Sweden and Genovis AB 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 Genovis AB, you can compare the effects of market volatilities on AVTECH Sweden 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 AVTECH Sweden with a short position of Genovis AB. Check out your portfolio center. Please also check ongoing floating volatility patterns of AVTECH Sweden and Genovis AB.

Diversification Opportunities for AVTECH Sweden and Genovis AB

-0.19

Correlation Coefficient

AVTECH Sweden  Genovis AB

Good diversification

The 3 months correlation between AVTECH and Genovis is -0.19. Overlapping area represents the amount of risk that can be diversified away by holding AVTECH Sweden AB and Genovis AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Genovis AB 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 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 AVTECH Sweden i.e., AVTECH Sweden and Genovis AB go up and down completely randomly.

Pair Corralation between AVTECH Sweden and Genovis AB

Assuming the 90 days trading horizon AVTECH Sweden AB is expected to generate 1.05 times more return on investment than Genovis AB. However, AVTECH Sweden is 1.05 times more volatile than Genovis AB. It trades about 0.06 of its potential returns per unit of risk. Genovis AB is currently generating about -0.06 per unit of risk. If you would invest  429.00  in AVTECH Sweden AB on October 7, 2024 and sell it today you would earn a total of  229.00  from holding AVTECH Sweden AB or generate 53.38% return on investment over 90 days.

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

AVTECH Sweden AB  vs.  Genovis AB

AVTECH Sweden AB

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in AVTECH Sweden AB are ranked lower than 8 (%) 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.

Genovis AB

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Genovis AB has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, Genovis AB is not utilizing all of its potentials. The newest stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with AVTECH Sweden and Genovis AB

The main advantage of trading using opposite AVTECH Sweden and Genovis AB positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AVTECH Sweden 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.

The idea behind AVTECH Sweden AB and Genovis 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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.