Correlation Between EQT AB and Investor

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

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

Diversification Opportunities for EQT AB and Investor

0.74

Correlation Coefficient

EQT AB  Investor

Poor diversification

The 3 months correlation between EQT and Investor is 0.74. Overlapping area represents the amount of risk that can be diversified away by holding EQT AB and Investor AB ser in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Investor AB ser 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 Investor. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Investor AB ser has no effect on the direction of EQT AB i.e., EQT AB and Investor go up and down completely randomly.

Pair Corralation between EQT AB and Investor

Assuming the 90 days trading horizon EQT AB is expected to under-perform the Investor. In addition to that, EQT AB is 2.16 times more volatile than Investor AB ser. It trades about -0.25 of its total potential returns per unit of risk. Investor AB ser is currently generating about 0.03 per unit of volatility. If you would invest  26,815  in Investor AB ser on February 3, 2024 and sell it today you would earn a total of  165.00  from holding Investor AB ser or generate 0.62% return on investment over 90 days.

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

EQT AB  vs.  Investor AB ser

EQT AB

Risk-Adjusted Performance

7 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in EQT AB are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively weak basic indicators, EQT AB may actually be approaching a critical reversion point that can send shares even higher in June 2024.

Investor AB ser

Risk-Adjusted Performance

14 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Investor AB ser are ranked lower than 14 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Investor may actually be approaching a critical reversion point that can send shares even higher in June 2024.

Pair Trading with EQT AB and Investor

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

The idea behind EQT AB and Investor 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.

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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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.