Correlation Between Thule Group and MIPS AB
Can any of the company-specific risk be diversified away by investing in both Thule Group 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 Thule Group and MIPS AB into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Thule Group AB and MIPS AB, you can compare the effects of market volatilities on Thule Group 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 Thule Group with a short position of MIPS AB. Check out your portfolio center. Please also check ongoing floating volatility patterns of Thule Group and MIPS AB.
Diversification Opportunities for Thule Group and MIPS AB
-0.6 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Thule and MIPS is -0.6. Overlapping area represents the amount of risk that can be diversified away by holding Thule Group AB and MIPS AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MIPS AB and Thule Group 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 Thule Group 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 Thule Group i.e., Thule Group and MIPS AB go up and down completely randomly.
Pair Corralation between Thule Group and MIPS AB
Assuming the 90 days trading horizon Thule Group is expected to generate 1.62 times less return on investment than MIPS AB. But when comparing it to its historical volatility, Thule Group AB is 1.51 times less risky than MIPS AB. It trades about 0.06 of its potential returns per unit of risk. MIPS AB is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 31,347 in MIPS AB on August 25, 2024 and sell it today you would earn a total of 16,133 from holding MIPS AB or generate 51.47% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Thule Group AB vs. MIPS AB
Performance |
| Timeline |
| Thule Group AB |
| MIPS AB |
Thule Group and MIPS AB Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Thule Group and MIPS AB
The main advantage of trading using opposite Thule Group and MIPS AB positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Thule Group 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.| Thule Group vs. MIPS AB | Thule Group vs. NIBE Industrier AB | Thule Group vs. Dometic Group AB | Thule Group vs. Husqvarna 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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.
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