Correlation Between Havsfrun Investment and Investment

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

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

Diversification Opportunities for Havsfrun Investment and Investment

0.56

Correlation Coefficient

Havsfrun Investment  Investment

Very weak diversification

The 3 months correlation between Havsfrun and Investment is 0.56. Overlapping area represents the amount of risk that can be diversified away by holding Havsfrun Investment AB and Investment AB Oresund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Investment AB Oresund and Havsfrun Investment 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 Havsfrun Investment AB are associated (or correlated) with Investment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Investment AB Oresund has no effect on the direction of Havsfrun Investment i.e., Havsfrun Investment and Investment go up and down completely randomly.

Pair Corralation between Havsfrun Investment and Investment

Assuming the 90 days trading horizon Havsfrun Investment AB is expected to generate 3.41 times more return on investment than Investment. However, Havsfrun Investment is 3.41 times more volatile than Investment AB Oresund. It trades about 0.24 of its potential returns per unit of risk. Investment AB Oresund is currently generating about 0.09 per unit of risk. If you would invest  1,245  in Havsfrun Investment AB on December 25, 2024 and sell it today you would earn a total of  1,255  from holding Havsfrun Investment AB or generate 100.8% return on investment over 90 days.

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

Havsfrun Investment AB  vs.  Investment AB Oresund

Havsfrun Investment

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Havsfrun Investment AB are ranked lower than 19 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, Havsfrun Investment unveiled solid returns over the last few months and may actually be approaching a breakup point.

Investment AB Oresund

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Investment AB Oresund are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, Investment may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Pair Trading with Havsfrun Investment and Investment

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

The idea behind Havsfrun Investment AB and Investment AB Oresund 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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.