Correlation Between Malmbergs Elektriska and Acconeer

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

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

Diversification Opportunities for Malmbergs Elektriska and Acconeer

0.44

Correlation Coefficient

Malmbergs Elektriska  Acconeer

Very weak diversification

The 3 months correlation between Malmbergs and Acconeer is 0.44. Overlapping area represents the amount of risk that can be diversified away by holding Malmbergs Elektriska AB and Acconeer AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Acconeer AB and Malmbergs Elektriska 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 Malmbergs Elektriska AB are associated (or correlated) with Acconeer. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Acconeer AB has no effect on the direction of Malmbergs Elektriska i.e., Malmbergs Elektriska and Acconeer go up and down completely randomly.

Pair Corralation between Malmbergs Elektriska and Acconeer

Assuming the 90 days trading horizon Malmbergs Elektriska is expected to generate 7.71 times less return on investment than Acconeer. But when comparing it to its historical volatility, Malmbergs Elektriska AB is 3.86 times less risky than Acconeer. It trades about 0.12 of its potential returns per unit of risk. Acconeer AB is currently generating about 0.24 of returns per unit of risk over similar time horizon. If you would invest  484.00  in Acconeer AB on January 31, 2024 and sell it today you would earn a total of  173.00  from holding Acconeer AB or generate 35.74% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	95.24%
Values	Daily Returns

Malmbergs Elektriska AB  vs.  Acconeer AB

Malmbergs Elektriska

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Malmbergs Elektriska AB has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest uncertain performance, the Stock's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the company investors.

Acconeer AB

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Acconeer AB has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of uncertain performance in the last few months, the Stock's basic indicators remain comparatively stable which may send shares a bit higher in May 2024. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Pair Trading with Malmbergs Elektriska and Acconeer

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

The idea behind Malmbergs Elektriska AB and Acconeer 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 Portfolio Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.