Correlation Between Midsummer and TalkPool
Can any of the company-specific risk be diversified away by investing in both Midsummer and TalkPool 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 Midsummer and TalkPool into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Midsummer AB and TalkPool AG, you can compare the effects of market volatilities on Midsummer and TalkPool 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 Midsummer with a short position of TalkPool. Check out your portfolio center. Please also check ongoing floating volatility patterns of Midsummer and TalkPool.
Diversification Opportunities for Midsummer and TalkPool
Average diversification
The 3 months correlation between Midsummer and TalkPool is 0.1. Overlapping area represents the amount of risk that can be diversified away by holding Midsummer AB and TalkPool AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on TalkPool AG and Midsummer 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 Midsummer AB are associated (or correlated) with TalkPool. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of TalkPool AG has no effect on the direction of Midsummer i.e., Midsummer and TalkPool go up and down completely randomly.
Pair Corralation between Midsummer and TalkPool
Assuming the 90 days trading horizon Midsummer AB is expected to generate 1.48 times more return on investment than TalkPool. However, Midsummer is 1.48 times more volatile than TalkPool AG. It trades about 0.05 of its potential returns per unit of risk. TalkPool AG is currently generating about 0.05 per unit of risk. If you would invest 94.00 in Midsummer AB on September 2, 2024 and sell it today you would earn a total of 38.00 from holding Midsummer AB or generate 40.43% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Midsummer AB vs. TalkPool AG
Performance |
| Timeline |
| Midsummer AB |
| TalkPool AG |
Midsummer and TalkPool Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Midsummer and TalkPool
The main advantage of trading using opposite Midsummer and TalkPool positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Midsummer position performs unexpectedly, TalkPool 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 TalkPool will offset losses from the drop in TalkPool's long position.| Midsummer vs. Eolus Vind AB | Midsummer vs. Sinch AB | Midsummer vs. Embracer Group AB | Midsummer vs. Powercell Sweden |
| TalkPool vs. Checkin Group AB | TalkPool vs. Midsummer AB | TalkPool vs. Hexatronic Group AB | TalkPool vs. Cint Group 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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.
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