Correlation Between OMX Stockholm and Paxman AB
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By analyzing existing cross correlation between OMX Stockholm Mid and Paxman AB, you can compare the effects of market volatilities on OMX Stockholm and Paxman 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 OMX Stockholm with a short position of Paxman AB. Check out your portfolio center. Please also check ongoing floating volatility patterns of OMX Stockholm and Paxman AB.
Diversification Opportunities for OMX Stockholm and Paxman AB
-0.41 | Correlation Coefficient |
Very good diversification
The 3 months correlation between OMX and Paxman is -0.41. Overlapping area represents the amount of risk that can be diversified away by holding OMX Stockholm Mid and Paxman AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Paxman AB 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 Paxman AB. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Paxman AB has no effect on the direction of OMX Stockholm i.e., OMX Stockholm and Paxman AB go up and down completely randomly.
Pair Corralation between OMX Stockholm and Paxman AB
Assuming the 90 days trading horizon OMX Stockholm is expected to generate 2.85 times less return on investment than Paxman AB. But when comparing it to its historical volatility, OMX Stockholm Mid is 3.29 times less risky than Paxman AB. It trades about 0.05 of its potential returns per unit of risk. Paxman AB is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 4,370 in Paxman AB on August 28, 2024 and sell it today you would earn a total of 2,630 from holding Paxman AB or generate 60.18% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 99.8% |
| Values | Daily Returns |
OMX Stockholm Mid vs. Paxman AB
Performance |
| Timeline |
OMX Stockholm and Paxman AB Volatility Contrast
Predicted Return Density |
| Returns |
OMX Stockholm Mid
Pair trading matchups for OMX Stockholm
Paxman AB
Pair trading matchups for Paxman AB
Pair Trading with OMX Stockholm and Paxman AB
The main advantage of trading using opposite OMX Stockholm and Paxman AB positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if OMX Stockholm position performs unexpectedly, Paxman 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 Paxman AB will offset losses from the drop in Paxman AB's long position.| OMX Stockholm vs. Skandinaviska Enskilda Banken | OMX Stockholm vs. Indutrade AB | OMX Stockholm vs. Arion banki hf | OMX Stockholm vs. Fractal Gaming Group |
| Paxman AB vs. Dignitana AB | Paxman AB vs. C Rad AB | Paxman AB vs. Surgical Science Sweden | Paxman AB vs. Sedana Medical 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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.
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