Correlation Between Intrum Justitia and Millicom International

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

Diversification Opportunities for Intrum Justitia and Millicom International

0.44
  Correlation Coefficient

Very weak diversification

The 3 months correlation between Intrum and Millicom is 0.44. Overlapping area represents the amount of risk that can be diversified away by holding Intrum Justitia AB and Millicom International Cellula in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Millicom International and Intrum Justitia 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 Intrum Justitia AB are associated (or correlated) with Millicom International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Millicom International has no effect on the direction of Intrum Justitia i.e., Intrum Justitia and Millicom International go up and down completely randomly.

Pair Corralation between Intrum Justitia and Millicom International

Assuming the 90 days trading horizon Intrum Justitia AB is expected to under-perform the Millicom International. In addition to that, Intrum Justitia is 2.72 times more volatile than Millicom International Cellular. It trades about -0.02 of its total potential returns per unit of risk. Millicom International Cellular is currently generating about 0.06 per unit of volatility. If you would invest  26,840  in Millicom International Cellular on November 3, 2024 and sell it today you would earn a total of  2,820  from holding Millicom International Cellular or generate 10.51% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthWeak
Accuracy100.0%
ValuesDaily Returns

Intrum Justitia AB  vs.  Millicom International Cellula

 Performance 
       Timeline  
Intrum Justitia AB 

Risk-Adjusted Performance

3 of 100

 
Weak
 
Strong
Insignificant
Compared to the overall equity markets, risk-adjusted returns on investments in Intrum Justitia AB are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Intrum Justitia sustained solid returns over the last few months and may actually be approaching a breakup point.
Millicom International 

Risk-Adjusted Performance

2 of 100

 
Weak
 
Strong
Weak
Compared to the overall equity markets, risk-adjusted returns on investments in Millicom International Cellular are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of rather sound basic indicators, Millicom International is not utilizing all of its potentials. The current stock price tumult, may contribute to shorter-term losses for the shareholders.

Intrum Justitia and Millicom International Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Intrum Justitia and Millicom International

The main advantage of trading using opposite Intrum Justitia and Millicom International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Intrum Justitia position performs unexpectedly, Millicom International 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 Millicom International will offset losses from the drop in Millicom International's long position.
The idea behind Intrum Justitia AB and Millicom International Cellular 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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.

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