Correlation Between Addtech AB and Greenland Hong

Can any of the company-specific risk be diversified away by investing in both Addtech AB and Greenland Hong 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 Addtech AB and Greenland Hong into the same portfolio, which is an essential part of the fundamental portfolio management process.

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

Diversification Opportunities for Addtech AB and Greenland Hong

0.16

Correlation Coefficient

Addtech AB  Greenland Hong

Average diversification

The 3 months correlation between Addtech and Greenland is 0.16. Overlapping area represents the amount of risk that can be diversified away by holding Addtech AB and Greenland Hong Kong in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Greenland Hong Kong and Addtech AB 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 Addtech AB are associated (or correlated) with Greenland Hong. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Greenland Hong Kong has no effect on the direction of Addtech AB i.e., Addtech AB and Greenland Hong go up and down completely randomly.

Pair Corralation between Addtech AB and Greenland Hong

Assuming the 90 days trading horizon Addtech AB is expected to generate 0.27 times more return on investment than Greenland Hong. However, Addtech AB is 3.76 times less risky than Greenland Hong. It trades about 0.07 of its potential returns per unit of risk. Greenland Hong Kong is currently generating about -0.06 per unit of risk. If you would invest  2,566  in Addtech AB on October 26, 2024 and sell it today you would earn a total of  164.00  from holding Addtech AB or generate 6.39% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	98.33%
Values	Daily Returns

Addtech AB  vs.  Greenland Hong Kong

Addtech AB

Risk-Adjusted Performance

5 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Addtech AB are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, Addtech AB may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Greenland Hong Kong

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Greenland Hong Kong has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fragile performance in the last few months, the Stock's basic indicators remain nearly stable which may send shares a bit higher in February 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Pair Trading with Addtech AB and Greenland Hong

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

The idea behind Addtech AB and Greenland Hong Kong 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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.