Correlation Between Gapwaves and Midsummer
Can any of the company-specific risk be diversified away by investing in both Gapwaves and Midsummer 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 Gapwaves and Midsummer into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Gapwaves AB Series and Midsummer AB, you can compare the effects of market volatilities on Gapwaves and Midsummer 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 Gapwaves with a short position of Midsummer. Check out your portfolio center. Please also check ongoing floating volatility patterns of Gapwaves and Midsummer.
Diversification Opportunities for Gapwaves and Midsummer
Excellent diversification
The 3 months correlation between Gapwaves and Midsummer is -0.7. Overlapping area represents the amount of risk that can be diversified away by holding Gapwaves AB Series and Midsummer AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Midsummer AB and Gapwaves 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 Gapwaves AB Series are associated (or correlated) with Midsummer. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Midsummer AB has no effect on the direction of Gapwaves i.e., Gapwaves and Midsummer go up and down completely randomly.
Pair Corralation between Gapwaves and Midsummer
Assuming the 90 days trading horizon Gapwaves AB Series is expected to generate 0.41 times more return on investment than Midsummer. However, Gapwaves AB Series is 2.42 times less risky than Midsummer. It trades about -0.04 of its potential returns per unit of risk. Midsummer AB is currently generating about -0.28 per unit of risk. If you would invest 1,448 in Gapwaves AB Series on October 26, 2024 and sell it today you would lose (36.00) from holding Gapwaves AB Series or give up 2.49% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Gapwaves AB Series vs. Midsummer AB
Performance |
| Timeline |
| Gapwaves AB Series |
| Midsummer AB |
Gapwaves and Midsummer Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Gapwaves and Midsummer
The main advantage of trading using opposite Gapwaves and Midsummer positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Gapwaves position performs unexpectedly, Midsummer 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 Midsummer will offset losses from the drop in Midsummer's long position.| Gapwaves vs. Sivers IMA Holding | Gapwaves vs. SaltX Technology Holding | Gapwaves vs. Acconeer AB | Gapwaves vs. Fingerprint Cards AB |
| Midsummer vs. Upsales Technology AB | Midsummer vs. Fractal Gaming Group | Midsummer vs. TF Bank AB | Midsummer vs. Leading Edge Materials |
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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.
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