Correlation Between Mavshack Publ and Nilsson Special

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

By analyzing existing cross correlation between Mavshack publ AB and Nilsson Special Vehicles, you can compare the effects of market volatilities on Mavshack Publ and Nilsson Special 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 Mavshack Publ with a short position of Nilsson Special. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mavshack Publ and Nilsson Special.

Diversification Opportunities for Mavshack Publ and Nilsson Special

-0.04

Correlation Coefficient

Mavshack Publ  Nilsson Special

Good diversification

The 3 months correlation between Mavshack and Nilsson is -0.04. Overlapping area represents the amount of risk that can be diversified away by holding Mavshack publ AB and Nilsson Special Vehicles in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nilsson Special Vehicles and Mavshack Publ 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 Mavshack publ AB are associated (or correlated) with Nilsson Special. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nilsson Special Vehicles has no effect on the direction of Mavshack Publ i.e., Mavshack Publ and Nilsson Special go up and down completely randomly.

Pair Corralation between Mavshack Publ and Nilsson Special

Assuming the 90 days trading horizon Mavshack publ AB is expected to generate 1.36 times more return on investment than Nilsson Special. However, Mavshack Publ is 1.36 times more volatile than Nilsson Special Vehicles. It trades about 0.01 of its potential returns per unit of risk. Nilsson Special Vehicles is currently generating about 0.0 per unit of risk. If you would invest  2.56  in Mavshack publ AB on December 31, 2024 and sell it today you would lose (0.62) from holding Mavshack publ AB or give up 24.22% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	98.39%
Values	Daily Returns

Mavshack publ AB  vs.  Nilsson Special Vehicles

Mavshack publ AB

Risk-Adjusted Performance

Weak

Over the last 90 days Mavshack publ AB has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, Mavshack Publ is not utilizing all of its potentials. The current stock price uproar, may contribute to short-horizon losses for the private investors.

Nilsson Special Vehicles

Risk-Adjusted Performance

Weak

Over the last 90 days Nilsson Special Vehicles has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, Nilsson Special is not utilizing all of its potentials. The current stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with Mavshack Publ and Nilsson Special

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

The idea behind Mavshack publ AB and Nilsson Special Vehicles 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 Portfolio Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.