Correlation Between MIPS AB and Fenix Outdoor
Can any of the company-specific risk be diversified away by investing in both MIPS AB and Fenix Outdoor 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 Fenix Outdoor into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between MIPS AB and Fenix Outdoor International, you can compare the effects of market volatilities on MIPS AB and Fenix Outdoor 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 Fenix Outdoor. Check out your portfolio center. Please also check ongoing floating volatility patterns of MIPS AB and Fenix Outdoor.
Diversification Opportunities for MIPS AB and Fenix Outdoor
0.64 | Correlation Coefficient |
Poor diversification
The 3 months correlation between MIPS and Fenix is 0.64. Overlapping area represents the amount of risk that can be diversified away by holding MIPS AB and Fenix Outdoor International in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fenix Outdoor Intern 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 Fenix Outdoor. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fenix Outdoor Intern has no effect on the direction of MIPS AB i.e., MIPS AB and Fenix Outdoor go up and down completely randomly.
Pair Corralation between MIPS AB and Fenix Outdoor
Assuming the 90 days trading horizon MIPS AB is expected to under-perform the Fenix Outdoor. In addition to that, MIPS AB is 1.63 times more volatile than Fenix Outdoor International. It trades about -0.26 of its total potential returns per unit of risk. Fenix Outdoor International is currently generating about -0.08 per unit of volatility. If you would invest 61,600 in Fenix Outdoor International on August 27, 2024 and sell it today you would lose (1,600) from holding Fenix Outdoor International or give up 2.6% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
MIPS AB vs. Fenix Outdoor International
Performance |
| Timeline |
| MIPS AB |
| Fenix Outdoor Intern |
MIPS AB and Fenix Outdoor Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with MIPS AB and Fenix Outdoor
The main advantage of trading using opposite MIPS AB and Fenix Outdoor positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if MIPS AB position performs unexpectedly, Fenix Outdoor 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 Fenix Outdoor will offset losses from the drop in Fenix Outdoor's long position.The idea behind MIPS AB and Fenix Outdoor International pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| Fenix Outdoor vs. Awardit AB | Fenix Outdoor vs. RVRC Holding AB | Fenix Outdoor vs. Smart Eye AB | Fenix Outdoor vs. KABE 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 Portfolio Center module to all portfolio management and optimization tools to improve performance of your portfolios.
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