Correlation Between AB Volvo and Prostatype Genomics

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

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

Diversification Opportunities for AB Volvo and Prostatype Genomics

-0.6

Correlation Coefficient

AB Volvo  Prostatype Genomics

Excellent diversification

The 3 months correlation between VOLV-A and Prostatype is -0.6. Overlapping area represents the amount of risk that can be diversified away by holding AB Volvo and Prostatype Genomics AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Prostatype Genomics and AB Volvo 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 AB Volvo are associated (or correlated) with Prostatype Genomics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Prostatype Genomics has no effect on the direction of AB Volvo i.e., AB Volvo and Prostatype Genomics go up and down completely randomly.

Pair Corralation between AB Volvo and Prostatype Genomics

Assuming the 90 days trading horizon AB Volvo is expected to generate 0.11 times more return on investment than Prostatype Genomics. However, AB Volvo is 9.43 times less risky than Prostatype Genomics. It trades about 0.06 of its potential returns per unit of risk. Prostatype Genomics AB is currently generating about -0.01 per unit of risk. If you would invest  25,220  in AB Volvo on April 23, 2025 and sell it today you would earn a total of  1,220  from holding AB Volvo or generate 4.84% return on investment over 90 days.

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

AB Volvo  vs.  Prostatype Genomics AB

AB Volvo

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in AB Volvo are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong essential indicators, AB Volvo is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Prostatype Genomics

Risk-Adjusted Performance

Very Weak

Over the last 90 days Prostatype Genomics AB has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest uncertain performance, the Stock's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the company investors.

Pair Trading with AB Volvo and Prostatype Genomics

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

The idea behind AB Volvo and Prostatype Genomics 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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.