Correlation Between Micro Systemation and Generic Sweden
Can any of the company-specific risk be diversified away by investing in both Micro Systemation and Generic Sweden 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 Micro Systemation and Generic Sweden into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Micro Systemation AB and Generic Sweden publ, you can compare the effects of market volatilities on Micro Systemation and Generic Sweden 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 Micro Systemation with a short position of Generic Sweden. Check out your portfolio center. Please also check ongoing floating volatility patterns of Micro Systemation and Generic Sweden.
Diversification Opportunities for Micro Systemation and Generic Sweden
-0.07 | Correlation Coefficient |
Good diversification
The 3 months correlation between Micro and Generic is -0.07. Overlapping area represents the amount of risk that can be diversified away by holding Micro Systemation AB and Generic Sweden publ in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Generic Sweden publ and Micro Systemation 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 Micro Systemation AB are associated (or correlated) with Generic Sweden. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Generic Sweden publ has no effect on the direction of Micro Systemation i.e., Micro Systemation and Generic Sweden go up and down completely randomly.
Pair Corralation between Micro Systemation and Generic Sweden
Assuming the 90 days trading horizon Micro Systemation is expected to generate 1.81 times less return on investment than Generic Sweden. In addition to that, Micro Systemation is 1.31 times more volatile than Generic Sweden publ. It trades about 0.05 of its total potential returns per unit of risk. Generic Sweden publ is currently generating about 0.12 per unit of volatility. If you would invest 4,520 in Generic Sweden publ on August 29, 2024 and sell it today you would earn a total of 620.00 from holding Generic Sweden publ or generate 13.72% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 98.46% |
| Values | Daily Returns |
Micro Systemation AB vs. Generic Sweden publ
Performance |
| Timeline |
| Micro Systemation |
| Generic Sweden publ |
Micro Systemation and Generic Sweden Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Micro Systemation and Generic Sweden
The main advantage of trading using opposite Micro Systemation and Generic Sweden positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Micro Systemation position performs unexpectedly, Generic Sweden 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 Generic Sweden will offset losses from the drop in Generic Sweden's long position.| Micro Systemation vs. Lifco AB | Micro Systemation vs. Lagercrantz Group AB | Micro Systemation vs. Addtech AB | Micro Systemation vs. Instalco Intressenter AB |
| Generic Sweden vs. FormPipe Software AB | Generic Sweden vs. Novotek AB | Generic Sweden vs. Hanza AB | Generic Sweden vs. Genovis 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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.
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