Correlation Between Promimic and Modern Times
Can any of the company-specific risk be diversified away by investing in both Promimic and Modern Times 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 Promimic and Modern Times into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Promimic AB and Modern Times Group, you can compare the effects of market volatilities on Promimic and Modern Times 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 Promimic with a short position of Modern Times. Check out your portfolio center. Please also check ongoing floating volatility patterns of Promimic and Modern Times.
Diversification Opportunities for Promimic and Modern Times
-0.89 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Promimic and Modern is -0.89. Overlapping area represents the amount of risk that can be diversified away by holding Promimic AB and Modern Times Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Modern Times Group and Promimic 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 Promimic AB are associated (or correlated) with Modern Times. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Modern Times Group has no effect on the direction of Promimic i.e., Promimic and Modern Times go up and down completely randomly.
Pair Corralation between Promimic and Modern Times
Assuming the 90 days trading horizon Promimic AB is expected to under-perform the Modern Times. In addition to that, Promimic is 2.05 times more volatile than Modern Times Group. It trades about -0.08 of its total potential returns per unit of risk. Modern Times Group is currently generating about 0.12 per unit of volatility. If you would invest 8,025 in Modern Times Group on October 22, 2024 and sell it today you would earn a total of 2,415 from holding Modern Times Group or generate 30.09% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Promimic AB vs. Modern Times Group
Performance |
| Timeline |
| Promimic AB |
| Modern Times Group |
Promimic and Modern Times Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Promimic and Modern Times
The main advantage of trading using opposite Promimic and Modern Times positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Promimic position performs unexpectedly, Modern Times 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 Modern Times will offset losses from the drop in Modern Times' long position.| Promimic vs. OssDsign AB | Promimic vs. ADDvise Group AB | Promimic vs. Paxman AB | Promimic vs. MilDef Group AB |
| Modern Times vs. Kinnevik Investment AB | Modern Times vs. Tele2 AB | Modern Times vs. Getinge AB ser | Modern Times vs. Securitas 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 Anywhere module to track or share privately all of your investments from the convenience of any device.
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