Correlation Between Proact IT and Inwido AB
Can any of the company-specific risk be diversified away by investing in both Proact IT and Inwido AB 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 Inwido AB 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 Inwido AB, you can compare the effects of market volatilities on Proact IT and Inwido 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 Proact IT with a short position of Inwido AB. Check out your portfolio center. Please also check ongoing floating volatility patterns of Proact IT and Inwido AB.
Diversification Opportunities for Proact IT and Inwido AB
Very weak diversification
The 3 months correlation between Proact and Inwido is 0.43. Overlapping area represents the amount of risk that can be diversified away by holding Proact IT Group and Inwido AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Inwido 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 Inwido AB. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Inwido AB has no effect on the direction of Proact IT i.e., Proact IT and Inwido AB go up and down completely randomly.
Pair Corralation between Proact IT and Inwido AB
Assuming the 90 days trading horizon Proact IT Group is expected to under-perform the Inwido AB. In addition to that, Proact IT is 1.95 times more volatile than Inwido AB. It trades about -0.08 of its total potential returns per unit of risk. Inwido AB is currently generating about 0.03 per unit of volatility. If you would invest 18,560 in Inwido AB on October 23, 2024 and sell it today you would earn a total of 200.00 from holding Inwido AB or generate 1.08% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Proact IT Group vs. Inwido AB
Performance |
| Timeline |
| Proact IT Group |
| Inwido AB |
Proact IT and Inwido AB Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Proact IT and Inwido AB
The main advantage of trading using opposite Proact IT and Inwido AB positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Proact IT position performs unexpectedly, Inwido 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 Inwido AB will offset losses from the drop in Inwido AB's long position.The idea behind Proact IT Group and Inwido 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.| Inwido AB vs. Adventure Box Technology | Inwido AB vs. White Pearl Technology | Inwido AB vs. Nordea Bank Abp | Inwido AB vs. Nordic Asia Investment |
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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.
Other Complementary Tools
| Alpha Finder Use alpha and beta coefficients to find investment opportunities after accounting for the risk | |
| Transaction History View history of all your transactions and understand their impact on performance | |
| Global Correlations Find global opportunities by holding instruments from different markets | |
| Volatility Analysis Get historical volatility and risk analysis based on latest market data | |
| Financial Widgets Easily integrated Macroaxis content with over 30 different plug-and-play financial widgets |