Correlation Between Maj Invest and Alm Brand

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

By analyzing existing cross correlation between Maj Invest Kontra and Alm Brand Invest, you can compare the effects of market volatilities on Maj Invest and Alm Brand 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 Maj Invest with a short position of Alm Brand. Check out your portfolio center. Please also check ongoing floating volatility patterns of Maj Invest and Alm Brand.

Diversification Opportunities for Maj Invest and Alm Brand

0.0

Correlation Coefficient

Maj Invest  Alm Brand

Pay attention - limited upside

The 3 months correlation between Maj and Alm is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Maj Invest Kontra and Alm Brand Invest in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Alm Brand Invest and Maj Invest 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 Maj Invest Kontra are associated (or correlated) with Alm Brand. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Alm Brand Invest has no effect on the direction of Maj Invest i.e., Maj Invest and Alm Brand go up and down completely randomly.

Pair Corralation between Maj Invest and Alm Brand

If you would invest (100.00) in Alm Brand Invest on September 5, 2024 and sell it today you would earn a total of  100.00  from holding Alm Brand Invest or generate -100.0% return on investment over 90 days.

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

Maj Invest Kontra  vs.  Alm Brand Invest

Maj Invest Kontra

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Maj Invest Kontra has generated negative risk-adjusted returns adding no value to fund investors. In spite of very healthy forward-looking indicators, Maj Invest is not utilizing all of its potentials. The latest stock price disarray, may contribute to short-term losses for the investors.

Alm Brand Invest

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Alm Brand Invest has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong forward indicators, Alm Brand is not utilizing all of its potentials. The latest stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Maj Invest and Alm Brand

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

The idea behind Maj Invest Kontra and Alm Brand Invest 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 Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.