Correlation Between MilDef Group and Promimic
Can any of the company-specific risk be diversified away by investing in both MilDef Group and Promimic 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 Promimic 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 Promimic AB, you can compare the effects of market volatilities on MilDef Group and Promimic 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 Promimic. Check out your portfolio center. Please also check ongoing floating volatility patterns of MilDef Group and Promimic.
Diversification Opportunities for MilDef Group and Promimic
-0.95 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between MilDef and Promimic is -0.95. Overlapping area represents the amount of risk that can be diversified away by holding MilDef Group AB and Promimic AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Promimic AB 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 Promimic. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Promimic AB has no effect on the direction of MilDef Group i.e., MilDef Group and Promimic go up and down completely randomly.
Pair Corralation between MilDef Group and Promimic
Assuming the 90 days trading horizon MilDef Group AB is expected to generate 1.01 times more return on investment than Promimic. However, MilDef Group is 1.01 times more volatile than Promimic AB. It trades about 0.08 of its potential returns per unit of risk. Promimic AB is currently generating about -0.16 per unit of risk. If you would invest 12,540 in MilDef Group AB on November 3, 2024 and sell it today you would earn a total of 440.00 from holding MilDef Group AB or generate 3.51% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
MilDef Group AB vs. Promimic AB
Performance |
| Timeline |
| MilDef Group AB |
| Promimic AB |
MilDef Group and Promimic Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with MilDef Group and Promimic
The main advantage of trading using opposite MilDef Group and Promimic positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if MilDef Group position performs unexpectedly, Promimic 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 Promimic will offset losses from the drop in Promimic's long position.| MilDef Group vs. Upsales Technology AB | MilDef Group vs. JLT Mobile Computers | MilDef Group vs. USWE Sports AB | MilDef Group vs. Diamyd Medical AB |
| Promimic vs. OssDsign AB | Promimic vs. ADDvise Group AB | Promimic vs. Paxman AB | Promimic vs. MilDef 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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.
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