Correlation Between MilDef Group and Vitec Software
Can any of the company-specific risk be diversified away by investing in both MilDef Group and Vitec Software 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 Vitec Software 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 Vitec Software Group, you can compare the effects of market volatilities on MilDef Group and Vitec Software 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 Vitec Software. Check out your portfolio center. Please also check ongoing floating volatility patterns of MilDef Group and Vitec Software.
Diversification Opportunities for MilDef Group and Vitec Software
-0.17 | Correlation Coefficient |
Good diversification
The 3 months correlation between MilDef and Vitec is -0.17. Overlapping area represents the amount of risk that can be diversified away by holding MilDef Group AB and Vitec Software Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Vitec Software Group 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 Vitec Software. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Vitec Software Group has no effect on the direction of MilDef Group i.e., MilDef Group and Vitec Software go up and down completely randomly.
Pair Corralation between MilDef Group and Vitec Software
Assuming the 90 days trading horizon MilDef Group AB is expected to generate 1.44 times more return on investment than Vitec Software. However, MilDef Group is 1.44 times more volatile than Vitec Software Group. It trades about 0.31 of its potential returns per unit of risk. Vitec Software Group is currently generating about 0.25 per unit of risk. If you would invest 10,020 in MilDef Group AB on September 12, 2024 and sell it today you would earn a total of 1,860 from holding MilDef Group AB or generate 18.56% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
MilDef Group AB vs. Vitec Software Group
Performance |
| Timeline |
| MilDef Group AB |
| Vitec Software Group |
MilDef Group and Vitec Software Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with MilDef Group and Vitec Software
The main advantage of trading using opposite MilDef Group and Vitec Software positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if MilDef Group position performs unexpectedly, Vitec Software 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 Vitec Software will offset losses from the drop in Vitec Software's long position.| MilDef Group vs. I Tech | MilDef Group vs. Filo Mining Corp | MilDef Group vs. Lundin Mining | MilDef Group vs. Redsense Medical AB |
| Vitec Software vs. Lifco AB | Vitec Software vs. Lagercrantz Group AB | Vitec Software vs. Addtech AB | Vitec Software 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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.
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