Correlation Between Doxa AB and Integrum

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

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

Diversification Opportunities for Doxa AB and Integrum

0.8

Correlation Coefficient

Doxa AB  Integrum

Very poor diversification

The 3 months correlation between Doxa and Integrum is 0.8. Overlapping area represents the amount of risk that can be diversified away by holding Doxa AB and Integrum AB Series in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Integrum AB Series and Doxa AB 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 Doxa AB are associated (or correlated) with Integrum. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Integrum AB Series has no effect on the direction of Doxa AB i.e., Doxa AB and Integrum go up and down completely randomly.

Pair Corralation between Doxa AB and Integrum

Assuming the 90 days trading horizon Doxa AB is expected to under-perform the Integrum. In addition to that, Doxa AB is 1.72 times more volatile than Integrum AB Series. It trades about -0.23 of its total potential returns per unit of risk. Integrum AB Series is currently generating about -0.25 per unit of volatility. If you would invest  2,870  in Integrum AB Series on September 15, 2024 and sell it today you would lose (1,025) from holding Integrum AB Series or give up 35.71% of portfolio value over 90 days.

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

Doxa AB  vs.  Integrum AB Series

Doxa AB

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Doxa AB 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.

Integrum AB Series

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Integrum AB Series 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 technical and fundamental indicators remain somewhat strong which may send shares a bit higher in January 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Pair Trading with Doxa AB and Integrum

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

The idea behind Doxa AB and Integrum AB Series 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.

Check out your portfolio center.

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 Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.