Correlation Between Realfiction Holding and Veg Of

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

By analyzing existing cross correlation between Realfiction Holding AB and Veg of Lund, you can compare the effects of market volatilities on Realfiction Holding and Veg Of 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 Realfiction Holding with a short position of Veg Of. Check out your portfolio center. Please also check ongoing floating volatility patterns of Realfiction Holding and Veg Of.

Diversification Opportunities for Realfiction Holding and Veg Of

0.76

Correlation Coefficient

Realfiction Holding  Veg Of

Poor diversification

The 3 months correlation between Realfiction and Veg is 0.76. Overlapping area represents the amount of risk that can be diversified away by holding Realfiction Holding AB and Veg of Lund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Veg of Lund and Realfiction Holding 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 Realfiction Holding AB are associated (or correlated) with Veg Of. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Veg of Lund has no effect on the direction of Realfiction Holding i.e., Realfiction Holding and Veg Of go up and down completely randomly.

Pair Corralation between Realfiction Holding and Veg Of

Assuming the 90 days trading horizon Realfiction Holding AB is expected to generate 0.39 times more return on investment than Veg Of. However, Realfiction Holding AB is 2.58 times less risky than Veg Of. It trades about -0.16 of its potential returns per unit of risk. Veg of Lund is currently generating about -0.12 per unit of risk. If you would invest  2,100  in Realfiction Holding AB on August 31, 2024 and sell it today you would lose (724.00) from holding Realfiction Holding AB or give up 34.48% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	98.46%
Values	Daily Returns

Realfiction Holding AB  vs.  Veg of Lund

Realfiction Holding

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Realfiction Holding AB 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 December 2024. The current disturbance may also be a sign of long term up-swing for the company investors.

Veg of Lund

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Veg of Lund 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 December 2024. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Pair Trading with Realfiction Holding and Veg Of

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

The idea behind Realfiction Holding AB and Veg of Lund 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 Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.