Correlation Between Soder Sportfiske and Genovis AB

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

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

Diversification Opportunities for Soder Sportfiske and Genovis AB

-0.32

Correlation Coefficient

Soder Sportfiske  Genovis AB

Very good diversification

The 3 months correlation between Soder and Genovis is -0.32. Overlapping area represents the amount of risk that can be diversified away by holding Soder Sportfiske AB and Genovis AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Genovis AB and Soder Sportfiske 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 Soder Sportfiske AB are associated (or correlated) with Genovis AB. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Genovis AB has no effect on the direction of Soder Sportfiske i.e., Soder Sportfiske and Genovis AB go up and down completely randomly.

Pair Corralation between Soder Sportfiske and Genovis AB

Assuming the 90 days trading horizon Soder Sportfiske AB is expected to under-perform the Genovis AB. In addition to that, Soder Sportfiske is 1.49 times more volatile than Genovis AB. It trades about -0.11 of its total potential returns per unit of risk. Genovis AB is currently generating about -0.01 per unit of volatility. If you would invest  2,455  in Genovis AB on October 4, 2024 and sell it today you would lose (15.00) from holding Genovis AB or give up 0.61% of portfolio value over 90 days.

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

Soder Sportfiske AB  vs.  Genovis AB

Soder Sportfiske

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Soder Sportfiske AB has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, Soder Sportfiske is not utilizing all of its potentials. The current stock price uproar, may contribute to short-horizon losses for the private investors.

Genovis AB

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Genovis AB has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, Genovis AB is not utilizing all of its potentials. The newest stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with Soder Sportfiske and Genovis AB

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

The idea behind Soder Sportfiske AB and Genovis 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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.