Correlation Between Precomp Solutions and ProfilGruppen
Can any of the company-specific risk be diversified away by investing in both Precomp Solutions and ProfilGruppen 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 Precomp Solutions and ProfilGruppen into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Precomp Solutions AB and ProfilGruppen AB, you can compare the effects of market volatilities on Precomp Solutions and ProfilGruppen 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 Precomp Solutions with a short position of ProfilGruppen. Check out your portfolio center. Please also check ongoing floating volatility patterns of Precomp Solutions and ProfilGruppen.
Diversification Opportunities for Precomp Solutions and ProfilGruppen
0.66 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Precomp and ProfilGruppen is 0.66. Overlapping area represents the amount of risk that can be diversified away by holding Precomp Solutions AB and ProfilGruppen AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ProfilGruppen AB and Precomp Solutions 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 Precomp Solutions AB are associated (or correlated) with ProfilGruppen. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ProfilGruppen AB has no effect on the direction of Precomp Solutions i.e., Precomp Solutions and ProfilGruppen go up and down completely randomly.
Pair Corralation between Precomp Solutions and ProfilGruppen
Assuming the 90 days trading horizon Precomp Solutions AB is expected to generate 11.75 times more return on investment than ProfilGruppen. However, Precomp Solutions is 11.75 times more volatile than ProfilGruppen AB. It trades about 0.0 of its potential returns per unit of risk. ProfilGruppen AB is currently generating about -0.15 per unit of risk. If you would invest 105.00 in Precomp Solutions AB on September 1, 2024 and sell it today you would lose (24.00) from holding Precomp Solutions AB or give up 22.86% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 86.96% |
| Values | Daily Returns |
Precomp Solutions AB vs. ProfilGruppen AB
Performance |
| Timeline |
| Precomp Solutions |
| ProfilGruppen AB |
Precomp Solutions and ProfilGruppen Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Precomp Solutions and ProfilGruppen
The main advantage of trading using opposite Precomp Solutions and ProfilGruppen positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Precomp Solutions position performs unexpectedly, ProfilGruppen 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 ProfilGruppen will offset losses from the drop in ProfilGruppen's long position.| Precomp Solutions vs. NetJobs Group AB | Precomp Solutions vs. Nicoccino Holding AB | Precomp Solutions vs. Ellen AB | Precomp Solutions vs. Mavshack publ AB |
| ProfilGruppen vs. Svedbergs i Dalstorp | ProfilGruppen vs. Softronic AB | ProfilGruppen vs. Novotek AB | ProfilGruppen vs. Prevas 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 Portfolio Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
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