Correlation Between Investor and Actic Group

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

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

Diversification Opportunities for Investor and Actic Group

-0.41

Correlation Coefficient

Investor  Actic Group

Very good diversification

The 3 months correlation between Investor and Actic is -0.41. Overlapping area represents the amount of risk that can be diversified away by holding Investor AB ser and Actic Group AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Actic Group AB and Investor 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 Investor AB ser are associated (or correlated) with Actic Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Actic Group AB has no effect on the direction of Investor i.e., Investor and Actic Group go up and down completely randomly.

Pair Corralation between Investor and Actic Group

Assuming the 90 days trading horizon Investor AB ser is expected to generate 0.46 times more return on investment than Actic Group. However, Investor AB ser is 2.17 times less risky than Actic Group. It trades about 0.1 of its potential returns per unit of risk. Actic Group AB is currently generating about 0.03 per unit of risk. If you would invest  26,815  in Investor AB ser on February 4, 2024 and sell it today you would earn a total of  530.00  from holding Investor AB ser or generate 1.98% return on investment over 90 days.

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

Investor AB ser  vs.  Actic Group AB

Investor AB ser

Risk-Adjusted Performance

15 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Investor AB ser are ranked lower than 15 (%) of all global equities and portfolios over the last 90 days. Despite somewhat uncertain basic indicators, Investor may actually be approaching a critical reversion point that can send shares even higher in June 2024.

Actic Group AB

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Actic Group AB has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, Actic Group 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 Investor and Actic Group

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

The idea behind Investor AB ser and Actic Group 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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..