Correlation Between EQT AB and Attendo AB

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

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

Diversification Opportunities for EQT AB and Attendo AB

-0.51

Correlation Coefficient

EQT AB  Attendo AB

Excellent diversification

The 3 months correlation between EQT and Attendo is -0.51. Overlapping area represents the amount of risk that can be diversified away by holding EQT AB and Attendo AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Attendo AB and EQT 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 EQT AB are associated (or correlated) with Attendo AB. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Attendo AB has no effect on the direction of EQT AB i.e., EQT AB and Attendo AB go up and down completely randomly.

Pair Corralation between EQT AB and Attendo AB

Assuming the 90 days trading horizon EQT AB is expected to generate 1.46 times less return on investment than Attendo AB. In addition to that, EQT AB is 1.66 times more volatile than Attendo AB. It trades about 0.03 of its total potential returns per unit of risk. Attendo AB is currently generating about 0.08 per unit of volatility. If you would invest  4,755  in Attendo AB on September 5, 2024 and sell it today you would earn a total of  255.00  from holding Attendo AB or generate 5.36% return on investment over 90 days.

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

EQT AB  vs.  Attendo AB

EQT AB

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in EQT AB are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable basic indicators, EQT AB is not utilizing all of its potentials. The newest stock price uproar, may contribute to short-horizon losses for the private investors.

Attendo AB

Risk-Adjusted Performance

6 of 100

Modest

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

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

The idea behind EQT AB and Attendo 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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.