Correlation Between MIPS AB and Profoto Holding
Can any of the company-specific risk be diversified away by investing in both MIPS AB and Profoto Holding 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 Profoto Holding into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between MIPS AB and Profoto Holding AB, you can compare the effects of market volatilities on MIPS AB and Profoto Holding 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 Profoto Holding. Check out your portfolio center. Please also check ongoing floating volatility patterns of MIPS AB and Profoto Holding.
Diversification Opportunities for MIPS AB and Profoto Holding
0.44 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between MIPS and Profoto is 0.44. Overlapping area represents the amount of risk that can be diversified away by holding MIPS AB and Profoto Holding AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Profoto Holding 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 Profoto Holding. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Profoto Holding AB has no effect on the direction of MIPS AB i.e., MIPS AB and Profoto Holding go up and down completely randomly.
Pair Corralation between MIPS AB and Profoto Holding
Assuming the 90 days trading horizon MIPS AB is expected to generate 0.97 times more return on investment than Profoto Holding. However, MIPS AB is 1.03 times less risky than Profoto Holding. It trades about 0.26 of its potential returns per unit of risk. Profoto Holding AB is currently generating about -0.11 per unit of risk. If you would invest 48,520 in MIPS AB on November 3, 2024 and sell it today you would earn a total of 5,680 from holding MIPS AB or generate 11.71% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
MIPS AB vs. Profoto Holding AB
Performance |
| Timeline |
| MIPS AB |
| Profoto Holding AB |
MIPS AB and Profoto Holding Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with MIPS AB and Profoto Holding
The main advantage of trading using opposite MIPS AB and Profoto Holding positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if MIPS AB position performs unexpectedly, Profoto Holding 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 Profoto Holding will offset losses from the drop in Profoto Holding'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 |
| Profoto Holding vs. eEducation Albert AB | Profoto Holding vs. White Pearl Technology | Profoto Holding vs. Investment AB Oresund | Profoto Holding vs. USWE Sports 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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