Correlation Between MIPS AB and Boozt AB
Can any of the company-specific risk be diversified away by investing in both MIPS AB and Boozt AB 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 MIPS AB and Boozt AB into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between MIPS AB and Boozt AB, you can compare the effects of market volatilities on MIPS AB and Boozt AB 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 MIPS AB with a short position of Boozt AB. Check out your portfolio center. Please also check ongoing floating volatility patterns of MIPS AB and Boozt AB.
Diversification Opportunities for MIPS AB and Boozt AB
Modest diversification
The 3 months correlation between MIPS and Boozt is 0.22. Overlapping area represents the amount of risk that can be diversified away by holding MIPS AB and Boozt AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Boozt AB and MIPS AB 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 MIPS AB are associated (or correlated) with Boozt AB. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Boozt AB has no effect on the direction of MIPS AB i.e., MIPS AB and Boozt AB go up and down completely randomly.
Pair Corralation between MIPS AB and Boozt AB
Assuming the 90 days trading horizon MIPS AB is expected to generate 2.07 times less return on investment than Boozt AB. But when comparing it to its historical volatility, MIPS AB is 1.06 times less risky than Boozt AB. It trades about 0.05 of its potential returns per unit of risk. Boozt AB is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest 10,200 in Boozt AB on November 3, 2024 and sell it today you would earn a total of 2,900 from holding Boozt AB or generate 28.43% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
MIPS AB vs. Boozt AB
Performance |
| Timeline |
| MIPS AB |
| Boozt AB |
MIPS AB and Boozt AB Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with MIPS AB and Boozt AB
The main advantage of trading using opposite MIPS AB and Boozt AB positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if MIPS AB position performs unexpectedly, Boozt AB 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 Boozt AB will offset losses from the drop in Boozt AB's long position.| MIPS AB vs. Thule Group AB | MIPS AB vs. Sinch AB | MIPS AB vs. Hexatronic Group AB | MIPS AB vs. NIBE Industrier 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 Global Correlations module to find global opportunities by holding instruments from different markets.
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