Correlation Between Vitrolife and Abliva AB

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

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

Diversification Opportunities for Vitrolife and Abliva AB

-0.42

Correlation Coefficient

Vitrolife  Abliva AB

Very good diversification

The 3 months correlation between Vitrolife and Abliva is -0.42. Overlapping area represents the amount of risk that can be diversified away by holding Vitrolife AB and Abliva AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Abliva AB and Vitrolife 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 Vitrolife AB are associated (or correlated) with Abliva AB. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Abliva AB has no effect on the direction of Vitrolife i.e., Vitrolife and Abliva AB go up and down completely randomly.

Pair Corralation between Vitrolife and Abliva AB

Assuming the 90 days trading horizon Vitrolife AB is expected to under-perform the Abliva AB. In addition to that, Vitrolife is 2.4 times more volatile than Abliva AB. It trades about -0.14 of its total potential returns per unit of risk. Abliva AB is currently generating about 0.08 per unit of volatility. If you would invest  42.00  in Abliva AB on December 23, 2024 and sell it today you would earn a total of  2.00  from holding Abliva AB or generate 4.76% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	93.33%
Values	Daily Returns

Vitrolife AB  vs.  Abliva AB

Vitrolife AB

Risk-Adjusted Performance

Very Weak

Over the last 90 days Vitrolife AB has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of uncertain performance in the last few months, the Stock's basic indicators remain comparatively stable which may send shares a bit higher in April 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Abliva AB

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Abliva AB are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable basic indicators, Abliva 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 Vitrolife and Abliva AB

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

The idea behind Vitrolife AB and Abliva 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 Portfolio Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.