Correlation Between Intrum Justitia and Resurs Holding

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

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

Diversification Opportunities for Intrum Justitia and Resurs Holding

0.34

Correlation Coefficient

Intrum Justitia  Resurs Holding

Weak diversification

The 3 months correlation between Intrum and Resurs is 0.34. Overlapping area represents the amount of risk that can be diversified away by holding Intrum Justitia AB and Resurs Holding AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Resurs Holding AB and Intrum Justitia 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 Intrum Justitia AB are associated (or correlated) with Resurs Holding. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Resurs Holding AB has no effect on the direction of Intrum Justitia i.e., Intrum Justitia and Resurs Holding go up and down completely randomly.

Pair Corralation between Intrum Justitia and Resurs Holding

Assuming the 90 days trading horizon Intrum Justitia AB is expected to under-perform the Resurs Holding. In addition to that, Intrum Justitia is 15.12 times more volatile than Resurs Holding AB. It trades about -0.24 of its total potential returns per unit of risk. Resurs Holding AB is currently generating about 0.01 per unit of volatility. If you would invest  2,350  in Resurs Holding AB on September 12, 2024 and sell it today you would earn a total of  2.00  from holding Resurs Holding AB or generate 0.09% return on investment over 90 days.

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

Intrum Justitia AB  vs.  Resurs Holding AB

Intrum Justitia AB

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Intrum Justitia AB has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak 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.

Resurs Holding AB

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Resurs Holding AB has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, Resurs Holding is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Intrum Justitia and Resurs Holding

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

The idea behind Intrum Justitia AB and Resurs Holding 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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.