Correlation Between AddLife AB and Micro Systemation
Can any of the company-specific risk be diversified away by investing in both AddLife AB and Micro Systemation 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 AddLife AB and Micro Systemation into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between AddLife AB and Micro Systemation AB, you can compare the effects of market volatilities on AddLife AB and Micro Systemation 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 AddLife AB with a short position of Micro Systemation. Check out your portfolio center. Please also check ongoing floating volatility patterns of AddLife AB and Micro Systemation.
Diversification Opportunities for AddLife AB and Micro Systemation
-0.77 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between AddLife and Micro is -0.77. Overlapping area represents the amount of risk that can be diversified away by holding AddLife AB and Micro Systemation AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Micro Systemation and AddLife 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 AddLife AB are associated (or correlated) with Micro Systemation. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Micro Systemation has no effect on the direction of AddLife AB i.e., AddLife AB and Micro Systemation go up and down completely randomly.
Pair Corralation between AddLife AB and Micro Systemation
Assuming the 90 days trading horizon AddLife AB is expected to generate 1.24 times more return on investment than Micro Systemation. However, AddLife AB is 1.24 times more volatile than Micro Systemation AB. It trades about 0.03 of its potential returns per unit of risk. Micro Systemation AB is currently generating about 0.03 per unit of risk. If you would invest 10,740 in AddLife AB on September 24, 2024 and sell it today you would earn a total of 2,940 from holding AddLife AB or generate 27.37% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Weak |
Accuracy | 100.0% |
Values | Daily Returns |
AddLife AB vs. Micro Systemation AB
Performance |
Timeline |
AddLife AB |
Micro Systemation |
AddLife AB and Micro Systemation Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with AddLife AB and Micro Systemation
The main advantage of trading using opposite AddLife AB and Micro Systemation positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AddLife AB position performs unexpectedly, Micro Systemation 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 Micro Systemation will offset losses from the drop in Micro Systemation's long position.AddLife AB vs. Addtech AB | AddLife AB vs. Lifco AB | AddLife AB vs. Indutrade AB | AddLife AB vs. Lagercrantz Group AB |
Micro Systemation vs. Lifco AB | Micro Systemation vs. Lagercrantz Group AB | Micro Systemation vs. Instalco Intressenter AB | Micro Systemation vs. AddLife 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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.
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