Correlation Between AbL Diagnostics and Covivio SA

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

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

Diversification Opportunities for AbL Diagnostics and Covivio SA

-0.06

Correlation Coefficient

AbL Diagnostics  Covivio SA

Good diversification

The 3 months correlation between AbL and Covivio is -0.06. Overlapping area represents the amount of risk that can be diversified away by holding AbL Diagnostics SA and Covivio SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Covivio SA and AbL Diagnostics 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 AbL Diagnostics SA are associated (or correlated) with Covivio SA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Covivio SA has no effect on the direction of AbL Diagnostics i.e., AbL Diagnostics and Covivio SA go up and down completely randomly.

Pair Corralation between AbL Diagnostics and Covivio SA

Assuming the 90 days trading horizon AbL Diagnostics is expected to generate 3.46 times less return on investment than Covivio SA. But when comparing it to its historical volatility, AbL Diagnostics SA is 1.49 times less risky than Covivio SA. It trades about 0.09 of its potential returns per unit of risk. Covivio SA is currently generating about 0.2 of returns per unit of risk over similar time horizon. If you would invest  4,855  in Covivio SA on April 25, 2025 and sell it today you would earn a total of  655.00  from holding Covivio SA or generate 13.49% return on investment over 90 days.

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

AbL Diagnostics SA  vs.  Covivio SA

AbL Diagnostics SA

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in AbL Diagnostics SA are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong basic indicators, AbL Diagnostics is not utilizing all of its potentials. The latest stock price disturbance, may contribute to short-term losses for the investors.

Covivio SA

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Covivio SA are ranked lower than 16 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Covivio SA sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with AbL Diagnostics and Covivio SA

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

The idea behind AbL Diagnostics SA and Covivio SA 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 Dashboard module to portfolio dashboard that provides centralized access to all your investments.