Correlation Between COOR Service and Alimak Hek

Can any of the company-specific risk be diversified away by investing in both COOR Service and Alimak Hek 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 COOR Service and Alimak Hek into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between COOR Service Management and Alimak Hek Group, you can compare the effects of market volatilities on COOR Service and Alimak Hek 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 COOR Service with a short position of Alimak Hek. Check out your portfolio center. Please also check ongoing floating volatility patterns of COOR Service and Alimak Hek.

Diversification Opportunities for COOR Service and Alimak Hek

-0.02

Correlation Coefficient

COOR Service  Alimak Hek

Good diversification

The 3 months correlation between COOR and Alimak is -0.02. Overlapping area represents the amount of risk that can be diversified away by holding COOR Service Management and Alimak Hek Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Alimak Hek Group and COOR Service 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 COOR Service Management are associated (or correlated) with Alimak Hek. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Alimak Hek Group has no effect on the direction of COOR Service i.e., COOR Service and Alimak Hek go up and down completely randomly.

Pair Corralation between COOR Service and Alimak Hek

Assuming the 90 days trading horizon COOR Service Management is expected to generate 0.99 times more return on investment than Alimak Hek. However, COOR Service Management is 1.02 times less risky than Alimak Hek. It trades about 0.23 of its potential returns per unit of risk. Alimak Hek Group is currently generating about 0.0 per unit of risk. If you would invest  3,384  in COOR Service Management on October 5, 2024 and sell it today you would earn a total of  196.00  from holding COOR Service Management or generate 5.79% return on investment over 90 days.

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

COOR Service Management  vs.  Alimak Hek Group

COOR Service Management

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days COOR Service Management has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of weak performance in the last few months, the Stock's basic indicators remain comparatively stable which may send shares a bit higher in February 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Alimak Hek Group

Risk-Adjusted Performance

5 of 100

Modest

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

Pair Trading with COOR Service and Alimak Hek

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

The idea behind COOR Service Management and Alimak Hek Group 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.

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 Portfolio Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.