Correlation Between Investment and Adventure Box

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

By analyzing existing cross correlation between Investment AB Oresund and Adventure Box Technology, you can compare the effects of market volatilities on Investment and Adventure Box 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 Investment with a short position of Adventure Box. Check out your portfolio center. Please also check ongoing floating volatility patterns of Investment and Adventure Box.

Diversification Opportunities for Investment and Adventure Box

-0.47

Correlation Coefficient

Investment  Adventure Box

Very good diversification

The 3 months correlation between Investment and Adventure is -0.47. Overlapping area represents the amount of risk that can be diversified away by holding Investment AB Oresund and Adventure Box Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Adventure Box Technology and Investment 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 Investment AB Oresund are associated (or correlated) with Adventure Box. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Adventure Box Technology has no effect on the direction of Investment i.e., Investment and Adventure Box go up and down completely randomly.

Pair Corralation between Investment and Adventure Box

Assuming the 90 days trading horizon Investment AB Oresund is expected to generate 0.14 times more return on investment than Adventure Box. However, Investment AB Oresund is 7.09 times less risky than Adventure Box. It trades about 0.09 of its potential returns per unit of risk. Adventure Box Technology is currently generating about -0.26 per unit of risk. If you would invest  10,820  in Investment AB Oresund on December 26, 2024 and sell it today you would earn a total of  860.00  from holding Investment AB Oresund or generate 7.95% return on investment over 90 days.

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

Investment AB Oresund  vs.  Adventure Box Technology

Investment AB Oresund

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Investment AB Oresund are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, Investment may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Adventure Box Technology

Risk-Adjusted Performance

Very Weak

Over the last 90 days Adventure Box Technology has generated negative risk-adjusted returns adding no value to investors with long positions. Despite uncertain performance in the last few months, the Stock's basic indicators remain somewhat strong which may send shares a bit higher in April 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Pair Trading with Investment and Adventure Box

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

The idea behind Investment AB Oresund and Adventure Box Technology 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 File Import module to quickly import all of your third-party portfolios from your local drive in csv format.