Correlation Between Proact IT and Rejlers AB
Can any of the company-specific risk be diversified away by investing in both Proact IT and Rejlers 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 Rejlers 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 Rejlers AB, you can compare the effects of market volatilities on Proact IT and Rejlers 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 Rejlers AB. Check out your portfolio center. Please also check ongoing floating volatility patterns of Proact IT and Rejlers AB.
Diversification Opportunities for Proact IT and Rejlers AB
0.51 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Proact and Rejlers is 0.51. Overlapping area represents the amount of risk that can be diversified away by holding Proact IT Group and Rejlers AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Rejlers 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 Rejlers AB. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Rejlers AB has no effect on the direction of Proact IT i.e., Proact IT and Rejlers AB go up and down completely randomly.
Pair Corralation between Proact IT and Rejlers AB
Assuming the 90 days trading horizon Proact IT Group is expected to generate 0.84 times more return on investment than Rejlers AB. However, Proact IT Group is 1.19 times less risky than Rejlers AB. It trades about 0.09 of its potential returns per unit of risk. Rejlers AB is currently generating about 0.0 per unit of risk. If you would invest 7,949 in Proact IT Group on August 30, 2024 and sell it today you would earn a total of 5,471 from holding Proact IT Group or generate 68.83% 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. Rejlers AB
Performance |
| Timeline |
| Proact IT Group |
| Rejlers AB |
Proact IT and Rejlers AB Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Proact IT and Rejlers AB
The main advantage of trading using opposite Proact IT and Rejlers AB positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Proact IT position performs unexpectedly, Rejlers 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 Rejlers AB will offset losses from the drop in Rejlers AB's long position.The idea behind Proact IT Group and Rejlers 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.| Rejlers AB vs. Proact IT Group | Rejlers AB vs. Nederman Holding AB | Rejlers AB vs. Sweco AB | Rejlers AB vs. Rottneros 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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.
Other Complementary Tools
| Content Syndication Quickly integrate customizable finance content to your own investment portal | |
| Insider Screener Find insiders across different sectors to evaluate their impact on performance | |
| Equity Forecasting Use basic forecasting models to generate price predictions and determine price momentum | |
| Portfolio Analyzer Portfolio analysis module that provides access to portfolio diagnostics and optimization engine | |
| Bonds Directory Find actively traded corporate debentures issued by US companies |