Correlation Between MilDef Group and Nitro Games
Can any of the company-specific risk be diversified away by investing in both MilDef Group and Nitro Games 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 MilDef Group and Nitro Games into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between MilDef Group AB and Nitro Games Oyj, you can compare the effects of market volatilities on MilDef Group and Nitro Games 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 MilDef Group with a short position of Nitro Games. Check out your portfolio center. Please also check ongoing floating volatility patterns of MilDef Group and Nitro Games.
Diversification Opportunities for MilDef Group and Nitro Games
0.49 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between MilDef and Nitro is 0.49. Overlapping area represents the amount of risk that can be diversified away by holding MilDef Group AB and Nitro Games Oyj in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nitro Games Oyj and MilDef Group 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 MilDef Group AB are associated (or correlated) with Nitro Games. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nitro Games Oyj has no effect on the direction of MilDef Group i.e., MilDef Group and Nitro Games go up and down completely randomly.
Pair Corralation between MilDef Group and Nitro Games
Assuming the 90 days trading horizon MilDef Group is expected to generate 4.7 times less return on investment than Nitro Games. But when comparing it to its historical volatility, MilDef Group AB is 1.21 times less risky than Nitro Games. It trades about 0.06 of its potential returns per unit of risk. Nitro Games Oyj is currently generating about 0.23 of returns per unit of risk over similar time horizon. If you would invest 226.00 in Nitro Games Oyj on October 31, 2024 and sell it today you would earn a total of 34.00 from holding Nitro Games Oyj or generate 15.04% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
MilDef Group AB vs. Nitro Games Oyj
Performance |
| Timeline |
| MilDef Group AB |
| Nitro Games Oyj |
MilDef Group and Nitro Games Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with MilDef Group and Nitro Games
The main advantage of trading using opposite MilDef Group and Nitro Games positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if MilDef Group position performs unexpectedly, Nitro Games 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 Nitro Games will offset losses from the drop in Nitro Games' long position.| MilDef Group vs. AroCell AB | MilDef Group vs. aXichem AB | MilDef Group vs. Gaming Corps AB | MilDef Group vs. Cantargia AB |
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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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
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