Correlation Between Proact IT and Aino Health
Can any of the company-specific risk be diversified away by investing in both Proact IT and Aino Health 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 Proact IT and Aino Health into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Proact IT Group and Aino Health AB, you can compare the effects of market volatilities on Proact IT and Aino Health 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 Proact IT with a short position of Aino Health. Check out your portfolio center. Please also check ongoing floating volatility patterns of Proact IT and Aino Health.
Diversification Opportunities for Proact IT and Aino Health
-0.75 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Proact and Aino is -0.75. Overlapping area represents the amount of risk that can be diversified away by holding Proact IT Group and Aino Health AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aino Health AB and Proact IT 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 Proact IT Group are associated (or correlated) with Aino Health. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aino Health AB has no effect on the direction of Proact IT i.e., Proact IT and Aino Health go up and down completely randomly.
Pair Corralation between Proact IT and Aino Health
Assuming the 90 days trading horizon Proact IT Group is expected to under-perform the Aino Health. But the stock apears to be less risky and, when comparing its historical volatility, Proact IT Group is 6.51 times less risky than Aino Health. The stock trades about -0.07 of its potential returns per unit of risk. The Aino Health AB is currently generating about 0.13 of returns per unit of risk over similar time horizon. If you would invest 14.00 in Aino Health AB on October 26, 2024 and sell it today you would earn a total of 9.00 from holding Aino Health AB or generate 64.29% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Proact IT Group vs. Aino Health AB
Performance |
| Timeline |
| Proact IT Group |
| Aino Health AB |
Proact IT and Aino Health Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Proact IT and Aino Health
The main advantage of trading using opposite Proact IT and Aino Health positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Proact IT position performs unexpectedly, Aino Health 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 Aino Health will offset losses from the drop in Aino Health's long position.The idea behind Proact IT Group and Aino Health AB pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| Aino Health vs. Greater Than AB | Aino Health vs. Diadrom Holding AB | Aino Health vs. Corline Biomedical AB | Aino Health vs. BIMobject 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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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