Correlation Between Polygiene and Rottneros
Can any of the company-specific risk be diversified away by investing in both Polygiene and Rottneros 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 Polygiene and Rottneros into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Polygiene AB and Rottneros AB, you can compare the effects of market volatilities on Polygiene and Rottneros 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 Polygiene with a short position of Rottneros. Check out your portfolio center. Please also check ongoing floating volatility patterns of Polygiene and Rottneros.
Diversification Opportunities for Polygiene and Rottneros
Pay attention - limited upside
The 3 months correlation between Polygiene and Rottneros is -0.83. Overlapping area represents the amount of risk that can be diversified away by holding Polygiene AB and Rottneros AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Rottneros AB and Polygiene 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 Polygiene AB are associated (or correlated) with Rottneros. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Rottneros AB has no effect on the direction of Polygiene i.e., Polygiene and Rottneros go up and down completely randomly.
Pair Corralation between Polygiene and Rottneros
Assuming the 90 days trading horizon Polygiene AB is expected to generate 2.75 times more return on investment than Rottneros. However, Polygiene is 2.75 times more volatile than Rottneros AB. It trades about 0.06 of its potential returns per unit of risk. Rottneros AB is currently generating about -0.09 per unit of risk. If you would invest 950.00 in Polygiene AB on September 24, 2024 and sell it today you would earn a total of 280.00 from holding Polygiene AB or generate 29.47% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Significant |
Accuracy | 100.0% |
Values | Daily Returns |
Polygiene AB vs. Rottneros AB
Performance |
Timeline |
Polygiene AB |
Rottneros AB |
Polygiene and Rottneros Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Polygiene and Rottneros
The main advantage of trading using opposite Polygiene and Rottneros positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Polygiene position performs unexpectedly, Rottneros 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 Rottneros will offset losses from the drop in Rottneros' long position.Polygiene vs. G5 Entertainment publ | Polygiene vs. Nexam Chemical Holding | Polygiene vs. Swedencare publ AB | Polygiene vs. Genovis AB |
Rottneros vs. BillerudKorsnas AB | Rottneros vs. SSAB AB | Rottneros vs. Svenska Cellulosa Aktiebolaget | Rottneros vs. Axfood AB |
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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.
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