Correlation Between Instalco Intressenter and Micro Systemation
Can any of the company-specific risk be diversified away by investing in both Instalco Intressenter and Micro Systemation 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 Instalco Intressenter and Micro Systemation into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Instalco Intressenter AB and Micro Systemation AB, you can compare the effects of market volatilities on Instalco Intressenter and Micro Systemation 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 Instalco Intressenter with a short position of Micro Systemation. Check out your portfolio center. Please also check ongoing floating volatility patterns of Instalco Intressenter and Micro Systemation.
Diversification Opportunities for Instalco Intressenter and Micro Systemation
-0.87 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Instalco and Micro is -0.87. Overlapping area represents the amount of risk that can be diversified away by holding Instalco Intressenter AB and Micro Systemation AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Micro Systemation and Instalco Intressenter 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 Instalco Intressenter AB are associated (or correlated) with Micro Systemation. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Micro Systemation has no effect on the direction of Instalco Intressenter i.e., Instalco Intressenter and Micro Systemation go up and down completely randomly.
Pair Corralation between Instalco Intressenter and Micro Systemation
Assuming the 90 days trading horizon Instalco Intressenter AB is expected to under-perform the Micro Systemation. In addition to that, Instalco Intressenter is 1.16 times more volatile than Micro Systemation AB. It trades about -0.01 of its total potential returns per unit of risk. Micro Systemation AB is currently generating about 0.02 per unit of volatility. If you would invest 4,792 in Micro Systemation AB on August 29, 2024 and sell it today you would earn a total of 288.00 from holding Micro Systemation AB or generate 6.01% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Instalco Intressenter AB vs. Micro Systemation AB
Performance |
| Timeline |
| Instalco Intressenter |
| Micro Systemation |
Instalco Intressenter and Micro Systemation Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Instalco Intressenter and Micro Systemation
The main advantage of trading using opposite Instalco Intressenter and Micro Systemation positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Instalco Intressenter position performs unexpectedly, Micro Systemation 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 Micro Systemation will offset losses from the drop in Micro Systemation's long position.| Instalco Intressenter vs. Lifco AB | Instalco Intressenter vs. Sdiptech AB | Instalco Intressenter vs. Vitec Software Group | Instalco Intressenter vs. Addtech AB |
| Micro Systemation vs. Lifco AB | Micro Systemation vs. Lagercrantz Group AB | Micro Systemation vs. Addtech AB | Micro Systemation vs. Instalco Intressenter AB |
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 Portfolio Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
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