Correlation Between ALM Equity and Alimak Hek

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

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

Diversification Opportunities for ALM Equity and Alimak Hek

-0.51

Correlation Coefficient

ALM Equity  Alimak Hek

Excellent diversification

The 3 months correlation between ALM and Alimak is -0.51. Overlapping area represents the amount of risk that can be diversified away by holding ALM Equity AB and Alimak Hek Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Alimak Hek Group and ALM Equity 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 ALM Equity AB are associated (or correlated) with Alimak Hek. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Alimak Hek Group has no effect on the direction of ALM Equity i.e., ALM Equity and Alimak Hek go up and down completely randomly.

Pair Corralation between ALM Equity and Alimak Hek

Assuming the 90 days trading horizon ALM Equity AB is expected to under-perform the Alimak Hek. In addition to that, ALM Equity is 1.65 times more volatile than Alimak Hek Group. It trades about -0.08 of its total potential returns per unit of risk. Alimak Hek Group is currently generating about 0.31 per unit of volatility. If you would invest  11,730  in Alimak Hek Group on April 22, 2025 and sell it today you would earn a total of  3,890  from holding Alimak Hek Group or generate 33.16% return on investment over 90 days.

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

ALM Equity AB  vs.  Alimak Hek Group

ALM Equity AB

Risk-Adjusted Performance

Very Weak

Over the last 90 days ALM Equity AB has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unsteady performance in the last few months, the Stock's primary indicators remain comparatively stable which may send shares a bit higher in August 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Alimak Hek Group

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Alimak Hek Group are ranked lower than 24 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, Alimak Hek unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with ALM Equity and Alimak Hek

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

The idea behind ALM Equity AB and Alimak Hek Group 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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.