Correlation Between Nilsson Special and Doxa AB

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

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

Diversification Opportunities for Nilsson Special and Doxa AB

0.03

Correlation Coefficient

Nilsson Special  Doxa AB

Significant diversification

The 3 months correlation between Nilsson and Doxa is 0.03. Overlapping area represents the amount of risk that can be diversified away by holding Nilsson Special Vehicles and Doxa AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Doxa AB and Nilsson Special 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 Nilsson Special Vehicles are associated (or correlated) with Doxa AB. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Doxa AB has no effect on the direction of Nilsson Special i.e., Nilsson Special and Doxa AB go up and down completely randomly.

Pair Corralation between Nilsson Special and Doxa AB

Assuming the 90 days trading horizon Nilsson Special Vehicles is expected to generate 0.93 times more return on investment than Doxa AB. However, Nilsson Special Vehicles is 1.08 times less risky than Doxa AB. It trades about 0.01 of its potential returns per unit of risk. Doxa AB is currently generating about -0.03 per unit of risk. If you would invest  324.00  in Nilsson Special Vehicles on December 30, 2024 and sell it today you would lose (44.00) from holding Nilsson Special Vehicles or give up 13.58% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	98.41%
Values	Daily Returns

Nilsson Special Vehicles  vs.  Doxa AB

Nilsson Special Vehicles

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Nilsson Special Vehicles are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, Nilsson Special may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Doxa AB

Risk-Adjusted Performance

Very Weak

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

Pair Trading with Nilsson Special and Doxa AB

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

The idea behind Nilsson Special Vehicles and Doxa 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.