Correlation Between Inwido AB and CellaVision

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

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

Diversification Opportunities for Inwido AB and CellaVision

0.71

Correlation Coefficient

Inwido AB  CellaVision

Poor diversification

The 3 months correlation between Inwido and CellaVision is 0.71. Overlapping area represents the amount of risk that can be diversified away by holding Inwido AB and CellaVision AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CellaVision AB and Inwido AB 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 Inwido AB are associated (or correlated) with CellaVision. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CellaVision AB has no effect on the direction of Inwido AB i.e., Inwido AB and CellaVision go up and down completely randomly.

Pair Corralation between Inwido AB and CellaVision

Assuming the 90 days trading horizon Inwido AB is expected to under-perform the CellaVision. But the stock apears to be less risky and, when comparing its historical volatility, Inwido AB is 1.69 times less risky than CellaVision. The stock trades about -0.01 of its potential returns per unit of risk. The CellaVision AB is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest  15,503  in CellaVision AB on April 20, 2025 and sell it today you would earn a total of  2,817  from holding CellaVision AB or generate 18.17% return on investment over 90 days.

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

Inwido AB  vs.  CellaVision AB

Inwido AB

Risk-Adjusted Performance

Very Weak

Over the last 90 days Inwido AB has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, Inwido AB is not utilizing all of its potentials. The newest stock price uproar, may contribute to short-horizon losses for the private investors.

CellaVision AB

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in CellaVision AB are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, CellaVision unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Inwido AB and CellaVision

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

The idea behind Inwido AB and CellaVision 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.

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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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.