Correlation Between Probi AB and SenzaGen
Can any of the company-specific risk be diversified away by investing in both Probi AB and SenzaGen 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 Probi AB and SenzaGen into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Probi AB and SenzaGen AB, you can compare the effects of market volatilities on Probi AB and SenzaGen 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 Probi AB with a short position of SenzaGen. Check out your portfolio center. Please also check ongoing floating volatility patterns of Probi AB and SenzaGen.
Diversification Opportunities for Probi AB and SenzaGen
Very good diversification
The 3 months correlation between Probi and SenzaGen is -0.38. Overlapping area represents the amount of risk that can be diversified away by holding Probi AB and SenzaGen AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SenzaGen AB and Probi AB 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 Probi AB are associated (or correlated) with SenzaGen. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SenzaGen AB has no effect on the direction of Probi AB i.e., Probi AB and SenzaGen go up and down completely randomly.
Pair Corralation between Probi AB and SenzaGen
Assuming the 90 days trading horizon Probi AB is expected to generate 5.35 times more return on investment than SenzaGen. However, Probi AB is 5.35 times more volatile than SenzaGen AB. It trades about 0.14 of its potential returns per unit of risk. SenzaGen AB is currently generating about -0.06 per unit of risk. If you would invest 27,900 in Probi AB on September 1, 2024 and sell it today you would earn a total of 6,800 from holding Probi AB or generate 24.37% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.65% |
| Values | Daily Returns |
Probi AB vs. SenzaGen AB
Performance |
| Timeline |
| Probi AB |
| SenzaGen AB |
Probi AB and SenzaGen Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Probi AB and SenzaGen
The main advantage of trading using opposite Probi AB and SenzaGen positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Probi AB position performs unexpectedly, SenzaGen 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 SenzaGen will offset losses from the drop in SenzaGen's long position.The idea behind Probi AB and SenzaGen 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.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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.
Other Complementary Tools
| Equity Forecasting Use basic forecasting models to generate price predictions and determine price momentum | |
| Insider Screener Find insiders across different sectors to evaluate their impact on performance | |
| Idea Breakdown Analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes | |
| Technical Analysis Check basic technical indicators and analysis based on most latest market data | |
| Stock Tickers Use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites |