Correlation Between Swedencare Publ and MIPS AB
Can any of the company-specific risk be diversified away by investing in both Swedencare Publ and MIPS 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 Swedencare Publ and MIPS AB into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Swedencare publ AB and MIPS AB, you can compare the effects of market volatilities on Swedencare Publ and MIPS 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 Swedencare Publ with a short position of MIPS AB. Check out your portfolio center. Please also check ongoing floating volatility patterns of Swedencare Publ and MIPS AB.
Diversification Opportunities for Swedencare Publ and MIPS AB
-0.34 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Swedencare and MIPS is -0.34. Overlapping area represents the amount of risk that can be diversified away by holding Swedencare publ AB and MIPS AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MIPS AB and Swedencare Publ 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 Swedencare publ AB are associated (or correlated) with MIPS AB. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MIPS AB has no effect on the direction of Swedencare Publ i.e., Swedencare Publ and MIPS AB go up and down completely randomly.
Pair Corralation between Swedencare Publ and MIPS AB
Assuming the 90 days trading horizon Swedencare publ AB is expected to generate 0.42 times more return on investment than MIPS AB. However, Swedencare publ AB is 2.38 times less risky than MIPS AB. It trades about 0.11 of its potential returns per unit of risk. MIPS AB is currently generating about -0.26 per unit of risk. If you would invest 4,600 in Swedencare publ AB on August 28, 2024 and sell it today you would earn a total of 108.00 from holding Swedencare publ AB or generate 2.35% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.45% |
| Values | Daily Returns |
Swedencare publ AB vs. MIPS AB
Performance |
| Timeline |
| Swedencare publ AB |
| MIPS AB |
Swedencare Publ and MIPS AB Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Swedencare Publ and MIPS AB
The main advantage of trading using opposite Swedencare Publ and MIPS AB positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Swedencare Publ position performs unexpectedly, MIPS 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 MIPS AB will offset losses from the drop in MIPS AB's long position.| Swedencare Publ vs. Enzymatica publ AB | Swedencare Publ vs. KABE Group AB | Swedencare Publ vs. IAR Systems Group | Swedencare Publ vs. Mekonomen 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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
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