Correlation Between America Great and AB Volvo

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

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

Diversification Opportunities for America Great and AB Volvo

-0.69

Correlation Coefficient

America Great  AB Volvo

Excellent diversification

The 3 months correlation between America and VOLAF is -0.69. Overlapping area represents the amount of risk that can be diversified away by holding America Great Health and AB Volvo in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AB Volvo and America Great 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 America Great Health are associated (or correlated) with AB Volvo. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AB Volvo has no effect on the direction of America Great i.e., America Great and AB Volvo go up and down completely randomly.

Pair Corralation between America Great and AB Volvo

Given the investment horizon of 90 days America Great Health is expected to generate 16.07 times more return on investment than AB Volvo. However, America Great is 16.07 times more volatile than AB Volvo. It trades about 0.02 of its potential returns per unit of risk. AB Volvo is currently generating about 0.08 per unit of risk. If you would invest  0.27  in America Great Health on May 2, 2025 and sell it today you would lose (0.23) from holding America Great Health or give up 85.19% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	98.39%
Values	Daily Returns

America Great Health  vs.  AB Volvo

America Great Health

Risk-Adjusted Performance

Very Weak

Compared to the overall equity markets, risk-adjusted returns on investments in America Great Health are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite fairly weak technical and fundamental indicators, America Great demonstrated solid returns over the last few months and may actually be approaching a breakup point.

AB Volvo

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in AB Volvo are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. Despite nearly weak basic indicators, AB Volvo may actually be approaching a critical reversion point that can send shares even higher in August 2025.

Pair Trading with America Great and AB Volvo

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

The idea behind America Great Health and AB Volvo 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 Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.