Correlation Between Industrivarden and Industrivarden

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

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

Diversification Opportunities for Industrivarden and Industrivarden

0.99

Correlation Coefficient

Industrivarden  Industrivarden

No risk reduction

The 3 months correlation between Industrivarden and Industrivarden is 0.99. Overlapping area represents the amount of risk that can be diversified away by holding Industrivarden AB ser and Industrivarden AB ser in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Industrivarden AB ser and Industrivarden 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 Industrivarden AB ser are associated (or correlated) with Industrivarden. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Industrivarden AB ser has no effect on the direction of Industrivarden i.e., Industrivarden and Industrivarden go up and down completely randomly.

Pair Corralation between Industrivarden and Industrivarden

Assuming the 90 days trading horizon Industrivarden AB ser is expected to generate 0.96 times more return on investment than Industrivarden. However, Industrivarden AB ser is 1.04 times less risky than Industrivarden. It trades about 0.04 of its potential returns per unit of risk. Industrivarden AB ser is currently generating about 0.04 per unit of risk. If you would invest  35,500  in Industrivarden AB ser on September 4, 2024 and sell it today you would earn a total of  860.00  from holding Industrivarden AB ser or generate 2.42% return on investment over 90 days.

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

Industrivarden AB ser  vs.  Industrivarden AB ser

Industrivarden AB ser

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Industrivarden AB ser are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong fundamental indicators, Industrivarden is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Industrivarden AB ser

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Industrivarden AB ser are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong fundamental indicators, Industrivarden is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Industrivarden and Industrivarden

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

The idea behind Industrivarden AB ser and Industrivarden AB ser 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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..