Correlation Between Photocat and Alleima AB

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Can any of the company-specific risk be diversified away by investing in both Photocat and Alleima AB 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 Photocat and Alleima AB into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Photocat AS and Alleima AB, you can compare the effects of market volatilities on Photocat and Alleima AB 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 Photocat with a short position of Alleima AB. Check out your portfolio center. Please also check ongoing floating volatility patterns of Photocat and Alleima AB.

Diversification Opportunities for Photocat and Alleima AB

0.61
  Correlation Coefficient

Poor diversification

The 3 months correlation between Photocat and Alleima is 0.61. Overlapping area represents the amount of risk that can be diversified away by holding Photocat AS and Alleima AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Alleima AB and Photocat 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 Photocat AS are associated (or correlated) with Alleima AB. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Alleima AB has no effect on the direction of Photocat i.e., Photocat and Alleima AB go up and down completely randomly.

Pair Corralation between Photocat and Alleima AB

Assuming the 90 days trading horizon Photocat AS is expected to generate 0.58 times more return on investment than Alleima AB. However, Photocat AS is 1.72 times less risky than Alleima AB. It trades about 0.13 of its potential returns per unit of risk. Alleima AB is currently generating about 0.0 per unit of risk. If you would invest  850.00  in Photocat AS on April 23, 2025 and sell it today you would earn a total of  95.00  from holding Photocat AS or generate 11.18% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthSignificant
Accuracy100.0%
ValuesDaily Returns

Photocat AS  vs.  Alleima AB

 Performance 
       Timeline  
Photocat AS 

Risk-Adjusted Performance

OK

 
Weak
 
Strong
Compared to the overall equity markets, risk-adjusted returns on investments in Photocat AS are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, Photocat may actually be approaching a critical reversion point that can send shares even higher in August 2025.
Alleima AB 

Risk-Adjusted Performance

Very Weak

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

Photocat and Alleima AB Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Photocat and Alleima AB

The main advantage of trading using opposite Photocat and Alleima AB positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Photocat position performs unexpectedly, Alleima AB 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 Alleima AB will offset losses from the drop in Alleima AB's long position.
The idea behind Photocat AS and Alleima 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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..

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