Correlation Between FLOW TRADERS and Swedish Orphan
Can any of the company-specific risk be diversified away by investing in both FLOW TRADERS and Swedish Orphan 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 FLOW TRADERS and Swedish Orphan into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between FLOW TRADERS LTD and Swedish Orphan Biovitrum, you can compare the effects of market volatilities on FLOW TRADERS and Swedish Orphan 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 FLOW TRADERS with a short position of Swedish Orphan. Check out your portfolio center. Please also check ongoing floating volatility patterns of FLOW TRADERS and Swedish Orphan.
Diversification Opportunities for FLOW TRADERS and Swedish Orphan
-0.24 | Correlation Coefficient |
Very good diversification
The 3 months correlation between FLOW and Swedish is -0.24. Overlapping area represents the amount of risk that can be diversified away by holding FLOW TRADERS LTD and Swedish Orphan Biovitrum in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Swedish Orphan Biovitrum and FLOW TRADERS 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 FLOW TRADERS LTD are associated (or correlated) with Swedish Orphan. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Swedish Orphan Biovitrum has no effect on the direction of FLOW TRADERS i.e., FLOW TRADERS and Swedish Orphan go up and down completely randomly.
Pair Corralation between FLOW TRADERS and Swedish Orphan
Assuming the 90 days horizon FLOW TRADERS is expected to generate 2.03 times less return on investment than Swedish Orphan. But when comparing it to its historical volatility, FLOW TRADERS LTD is 1.78 times less risky than Swedish Orphan. It trades about 0.05 of its potential returns per unit of risk. Swedish Orphan Biovitrum is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 2,600 in Swedish Orphan Biovitrum on October 9, 2024 and sell it today you would earn a total of 180.00 from holding Swedish Orphan Biovitrum or generate 6.92% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Insignificant |
Accuracy | 100.0% |
Values | Daily Returns |
FLOW TRADERS LTD vs. Swedish Orphan Biovitrum
Performance |
Timeline |
FLOW TRADERS LTD |
Swedish Orphan Biovitrum |
FLOW TRADERS and Swedish Orphan Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with FLOW TRADERS and Swedish Orphan
The main advantage of trading using opposite FLOW TRADERS and Swedish Orphan positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if FLOW TRADERS position performs unexpectedly, Swedish Orphan 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 Swedish Orphan will offset losses from the drop in Swedish Orphan's long position.FLOW TRADERS vs. The Charles Schwab | FLOW TRADERS vs. Superior Plus Corp | FLOW TRADERS vs. NMI Holdings | FLOW TRADERS vs. SIVERS SEMICONDUCTORS AB |
Swedish Orphan vs. Martin Marietta Materials | Swedish Orphan vs. FIREWEED METALS P | Swedish Orphan vs. MCEWEN MINING INC | Swedish Orphan vs. MAGNUM MINING EXP |
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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..
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