Correlation Between Instalco Intressenter and Afry AB

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

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

Diversification Opportunities for Instalco Intressenter and Afry AB

0.92

Correlation Coefficient

Instalco Intressenter  Afry AB

Almost no diversification

The 3 months correlation between Instalco and Afry is 0.92. Overlapping area represents the amount of risk that can be diversified away by holding Instalco Intressenter AB and Afry AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Afry AB and Instalco Intressenter 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 Instalco Intressenter AB are associated (or correlated) with Afry AB. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Afry AB has no effect on the direction of Instalco Intressenter i.e., Instalco Intressenter and Afry AB go up and down completely randomly.

Pair Corralation between Instalco Intressenter and Afry AB

Assuming the 90 days trading horizon Instalco Intressenter AB is expected to generate 1.32 times more return on investment than Afry AB. However, Instalco Intressenter is 1.32 times more volatile than Afry AB. It trades about -0.06 of its potential returns per unit of risk. Afry AB is currently generating about -0.09 per unit of risk. If you would invest  4,096  in Instalco Intressenter AB on September 27, 2024 and sell it today you would lose (824.00) from holding Instalco Intressenter AB or give up 20.12% of portfolio value over 90 days.

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

Instalco Intressenter AB  vs.  Afry AB

Instalco Intressenter

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Instalco Intressenter AB has generated negative risk-adjusted returns adding no value to investors with long positions. Despite uncertain performance in the last few months, the Stock's basic indicators remain somewhat strong which may send shares a bit higher in January 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Afry AB

Risk-Adjusted Performance

0 of 100

Very Weak

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

Pair Trading with Instalco Intressenter and Afry AB

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

The idea behind Instalco Intressenter AB and Afry 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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.