Correlation Between OMX Stockholm and Cyber Security
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By analyzing existing cross correlation between OMX Stockholm Mid and Cyber Security 1, you can compare the effects of market volatilities on OMX Stockholm and Cyber Security 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 OMX Stockholm with a short position of Cyber Security. Check out your portfolio center. Please also check ongoing floating volatility patterns of OMX Stockholm and Cyber Security.
Diversification Opportunities for OMX Stockholm and Cyber Security
0.36 | Correlation Coefficient |
Weak diversification
The 3 months correlation between OMX and Cyber is 0.36. Overlapping area represents the amount of risk that can be diversified away by holding OMX Stockholm Mid and Cyber Security 1 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cyber Security 1 and OMX Stockholm 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 OMX Stockholm Mid are associated (or correlated) with Cyber Security. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cyber Security 1 has no effect on the direction of OMX Stockholm i.e., OMX Stockholm and Cyber Security go up and down completely randomly.
Pair Corralation between OMX Stockholm and Cyber Security
Assuming the 90 days trading horizon OMX Stockholm Mid is expected to under-perform the Cyber Security. But the index apears to be less risky and, when comparing its historical volatility, OMX Stockholm Mid is 10.37 times less risky than Cyber Security. The index trades about -0.12 of its potential returns per unit of risk. The Cyber Security 1 is currently generating about 0.17 of returns per unit of risk over similar time horizon. If you would invest 0.74 in Cyber Security 1 on October 12, 2024 and sell it today you would earn a total of 0.14 from holding Cyber Security 1 or generate 18.92% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 94.12% |
| Values | Daily Returns |
OMX Stockholm Mid vs. Cyber Security 1
Performance |
| Timeline |
OMX Stockholm and Cyber Security Volatility Contrast
Predicted Return Density |
| Returns |
OMX Stockholm Mid
Pair trading matchups for OMX Stockholm
Cyber Security 1
Pair trading matchups for Cyber Security
Pair Trading with OMX Stockholm and Cyber Security
The main advantage of trading using opposite OMX Stockholm and Cyber Security positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if OMX Stockholm position performs unexpectedly, Cyber Security 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 Cyber Security will offset losses from the drop in Cyber Security's long position.| OMX Stockholm vs. COOR Service Management | OMX Stockholm vs. Invisio Communications AB | OMX Stockholm vs. Havsfrun Investment AB | OMX Stockholm vs. Vitec Software Group |
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 Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
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