Correlation Between Svenska Aerogel and Aino Health

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

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

Diversification Opportunities for Svenska Aerogel and Aino Health

-0.14

Correlation Coefficient

Svenska Aerogel  Aino Health

Good diversification

The 3 months correlation between Svenska and Aino is -0.14. Overlapping area represents the amount of risk that can be diversified away by holding Svenska Aerogel Holding and Aino Health AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aino Health AB and Svenska Aerogel 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 Svenska Aerogel Holding are associated (or correlated) with Aino Health. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aino Health AB has no effect on the direction of Svenska Aerogel i.e., Svenska Aerogel and Aino Health go up and down completely randomly.

Pair Corralation between Svenska Aerogel and Aino Health

Assuming the 90 days trading horizon Svenska Aerogel Holding is expected to under-perform the Aino Health. In addition to that, Svenska Aerogel is 1.15 times more volatile than Aino Health AB. It trades about -0.05 of its total potential returns per unit of risk. Aino Health AB is currently generating about 0.09 per unit of volatility. If you would invest  12.00  in Aino Health AB on September 4, 2024 and sell it today you would earn a total of  3.00  from holding Aino Health AB or generate 25.0% return on investment over 90 days.

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

Svenska Aerogel Holding  vs.  Aino Health AB

Svenska Aerogel Holding

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Svenska Aerogel Holding 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 January 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Aino Health AB

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Aino Health AB are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, Aino Health unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Svenska Aerogel and Aino Health

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

The idea behind Svenska Aerogel Holding and Aino Health 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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.