Correlation Between Zwipe AS and Indutrade

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

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

Diversification Opportunities for Zwipe AS and Indutrade

0.01

Correlation Coefficient

Zwipe AS  Indutrade

Significant diversification

The 3 months correlation between Zwipe and Indutrade is 0.01. Overlapping area represents the amount of risk that can be diversified away by holding Zwipe AS and Indutrade AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Indutrade AB and Zwipe AS 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 Zwipe AS are associated (or correlated) with Indutrade. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Indutrade AB has no effect on the direction of Zwipe AS i.e., Zwipe AS and Indutrade go up and down completely randomly.

Pair Corralation between Zwipe AS and Indutrade

Assuming the 90 days trading horizon Zwipe AS is expected to under-perform the Indutrade. In addition to that, Zwipe AS is 15.33 times more volatile than Indutrade AB. It trades about -0.01 of its total potential returns per unit of risk. Indutrade AB is currently generating about 0.06 per unit of volatility. If you would invest  27,760  in Indutrade AB on December 24, 2024 and sell it today you would earn a total of  1,340  from holding Indutrade AB or generate 4.83% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	84.75%
Values	Daily Returns

Zwipe AS  vs.  Indutrade AB

Zwipe AS

Risk-Adjusted Performance

Very Weak

Over the last 90 days Zwipe AS 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.

Indutrade AB

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Indutrade AB are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable basic indicators, Indutrade is not utilizing all of its potentials. The current stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with Zwipe AS and Indutrade

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

The idea behind Zwipe AS and Indutrade 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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.