Correlation Between OptiCept Technologies and MTI Investment
Can any of the company-specific risk be diversified away by investing in both OptiCept Technologies and MTI Investment 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 OptiCept Technologies and MTI Investment into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between OptiCept Technologies AB and MTI Investment SE, you can compare the effects of market volatilities on OptiCept Technologies and MTI Investment 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 OptiCept Technologies with a short position of MTI Investment. Check out your portfolio center. Please also check ongoing floating volatility patterns of OptiCept Technologies and MTI Investment.
Diversification Opportunities for OptiCept Technologies and MTI Investment
0.76 | Correlation Coefficient |
Poor diversification
The 3 months correlation between OptiCept and MTI is 0.76. Overlapping area represents the amount of risk that can be diversified away by holding OptiCept Technologies AB and MTI Investment SE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MTI Investment SE and OptiCept Technologies 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 OptiCept Technologies AB are associated (or correlated) with MTI Investment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MTI Investment SE has no effect on the direction of OptiCept Technologies i.e., OptiCept Technologies and MTI Investment go up and down completely randomly.
Pair Corralation between OptiCept Technologies and MTI Investment
Assuming the 90 days trading horizon OptiCept Technologies AB is expected to generate 1.36 times more return on investment than MTI Investment. However, OptiCept Technologies is 1.36 times more volatile than MTI Investment SE. It trades about 0.01 of its potential returns per unit of risk. MTI Investment SE is currently generating about -0.08 per unit of risk. If you would invest 560.00 in OptiCept Technologies AB on August 30, 2024 and sell it today you would lose (53.00) from holding OptiCept Technologies AB or give up 9.46% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
OptiCept Technologies AB vs. MTI Investment SE
Performance |
| Timeline |
| OptiCept Technologies |
| MTI Investment SE |
OptiCept Technologies and MTI Investment Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with OptiCept Technologies and MTI Investment
The main advantage of trading using opposite OptiCept Technologies and MTI Investment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if OptiCept Technologies position performs unexpectedly, MTI Investment 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 MTI Investment will offset losses from the drop in MTI Investment's long position.| OptiCept Technologies vs. Kinnevik Investment AB | OptiCept Technologies vs. Media and Games | OptiCept Technologies vs. Upsales Technology AB | OptiCept Technologies vs. Neola Medical AB |
| MTI Investment vs. Investor AB ser | MTI Investment vs. Investment AB Latour | MTI Investment vs. Tele2 AB | MTI Investment vs. Boliden 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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.
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