Correlation Between Inwido AB and Elanders

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

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

Diversification Opportunities for Inwido AB and Elanders

0.57

Correlation Coefficient

Inwido AB  Elanders

Very weak diversification

The 3 months correlation between Inwido and Elanders is 0.57. Overlapping area represents the amount of risk that can be diversified away by holding Inwido AB and Elanders AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Elanders AB and Inwido 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 Inwido AB are associated (or correlated) with Elanders. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Elanders AB has no effect on the direction of Inwido AB i.e., Inwido AB and Elanders go up and down completely randomly.

Pair Corralation between Inwido AB and Elanders

Assuming the 90 days trading horizon Inwido AB is expected to generate 0.86 times more return on investment than Elanders. However, Inwido AB is 1.17 times less risky than Elanders. It trades about 0.02 of its potential returns per unit of risk. Elanders AB is currently generating about -0.04 per unit of risk. If you would invest  18,070  in Inwido AB on September 2, 2024 and sell it today you would earn a total of  230.00  from holding Inwido AB or generate 1.27% return on investment over 90 days.

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

Inwido AB  vs.  Elanders AB

Inwido AB

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Inwido AB are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable basic indicators, Inwido AB is not utilizing all of its potentials. The newest stock price uproar, may contribute to short-horizon losses for the private investors.

Elanders AB

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Elanders AB has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, Elanders is not utilizing all of its potentials. The newest stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Inwido AB and Elanders

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

The idea behind Inwido AB and Elanders 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.

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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.