Correlation Between EEducation Albert and AVTECH Sweden

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

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

Diversification Opportunities for EEducation Albert and AVTECH Sweden

-0.01

Correlation Coefficient

EEducation Albert  AVTECH Sweden

Good diversification

The 3 months correlation between EEducation and AVTECH is -0.01. Overlapping area represents the amount of risk that can be diversified away by holding eEducation Albert AB and AVTECH Sweden AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AVTECH Sweden AB and EEducation Albert 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 eEducation Albert AB are associated (or correlated) with AVTECH Sweden. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AVTECH Sweden AB has no effect on the direction of EEducation Albert i.e., EEducation Albert and AVTECH Sweden go up and down completely randomly.

Pair Corralation between EEducation Albert and AVTECH Sweden

Assuming the 90 days trading horizon EEducation Albert is expected to generate 9.85 times less return on investment than AVTECH Sweden. In addition to that, EEducation Albert is 1.43 times more volatile than AVTECH Sweden AB. It trades about 0.01 of its total potential returns per unit of risk. AVTECH Sweden AB is currently generating about 0.2 per unit of volatility. If you would invest  724.00  in AVTECH Sweden AB on April 23, 2025 and sell it today you would earn a total of  361.00  from holding AVTECH Sweden AB or generate 49.86% return on investment over 90 days.

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

eEducation Albert AB  vs.  AVTECH Sweden AB

eEducation Albert

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in eEducation Albert AB are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong fundamental drivers, EEducation Albert is not utilizing all of its potentials. The newest stock price disturbance, may contribute to short-term losses for the investors.

AVTECH Sweden AB

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in AVTECH Sweden AB are ranked lower than 15 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively weak basic indicators, AVTECH Sweden unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with EEducation Albert and AVTECH Sweden

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

The idea behind eEducation Albert AB and AVTECH Sweden 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.

Check out your portfolio center.

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.