Correlation Between Svedbergs and Inwido AB

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

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

Diversification Opportunities for Svedbergs and Inwido AB

0.55

Correlation Coefficient

Svedbergs  Inwido AB

Very weak diversification

The 3 months correlation between Svedbergs and Inwido is 0.55. Overlapping area represents the amount of risk that can be diversified away by holding Svedbergs i Dalstorp and Inwido AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Inwido AB and Svedbergs 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 Svedbergs i Dalstorp are associated (or correlated) with Inwido AB. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Inwido AB has no effect on the direction of Svedbergs i.e., Svedbergs and Inwido AB go up and down completely randomly.

Pair Corralation between Svedbergs and Inwido AB

Assuming the 90 days trading horizon Svedbergs i Dalstorp is expected to under-perform the Inwido AB. In addition to that, Svedbergs is 1.09 times more volatile than Inwido AB. It trades about -0.02 of its total potential returns per unit of risk. Inwido AB is currently generating about 0.02 per unit of volatility. 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

Svedbergs i Dalstorp  vs.  Inwido AB

Svedbergs i Dalstorp

Risk-Adjusted Performance

0 of 100

Very Weak

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

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.

Pair Trading with Svedbergs and Inwido AB

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

The idea behind Svedbergs i Dalstorp and Inwido 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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.