Correlation Between Alcadon Group and Advenica

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

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

Diversification Opportunities for Alcadon Group and Advenica

0.23

Correlation Coefficient

Alcadon Group  Advenica

Modest diversification

The 3 months correlation between Alcadon and Advenica is 0.23. Overlapping area represents the amount of risk that can be diversified away by holding Alcadon Group AB and Advenica AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Advenica AB and Alcadon Group 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 Alcadon Group AB are associated (or correlated) with Advenica. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Advenica AB has no effect on the direction of Alcadon Group i.e., Alcadon Group and Advenica go up and down completely randomly.

Pair Corralation between Alcadon Group and Advenica

Assuming the 90 days trading horizon Alcadon Group is expected to generate 1.93 times less return on investment than Advenica. But when comparing it to its historical volatility, Alcadon Group AB is 1.5 times less risky than Advenica. It trades about 0.07 of its potential returns per unit of risk. Advenica AB is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest  1,997  in Advenica AB on April 23, 2025 and sell it today you would earn a total of  363.00  from holding Advenica AB or generate 18.18% return on investment over 90 days.

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

Alcadon Group AB  vs.  Advenica AB

Alcadon Group AB

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Alcadon Group AB are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, Alcadon Group may actually be approaching a critical reversion point that can send shares even higher in August 2025.

Advenica AB

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Advenica AB are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively weak basic indicators, Advenica unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Alcadon Group and Advenica

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

The idea behind Alcadon Group AB and Advenica 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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.