Correlation Between Eolus Vind and Midsummer
Can any of the company-specific risk be diversified away by investing in both Eolus Vind and Midsummer 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 Eolus Vind and Midsummer into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Eolus Vind AB and Midsummer AB, you can compare the effects of market volatilities on Eolus Vind and Midsummer 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 Eolus Vind with a short position of Midsummer. Check out your portfolio center. Please also check ongoing floating volatility patterns of Eolus Vind and Midsummer.
Diversification Opportunities for Eolus Vind and Midsummer
0.33 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Eolus and Midsummer is 0.33. Overlapping area represents the amount of risk that can be diversified away by holding Eolus Vind AB and Midsummer AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Midsummer AB and Eolus Vind 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 Eolus Vind AB are associated (or correlated) with Midsummer. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Midsummer AB has no effect on the direction of Eolus Vind i.e., Eolus Vind and Midsummer go up and down completely randomly.
Pair Corralation between Eolus Vind and Midsummer
Assuming the 90 days trading horizon Eolus Vind is expected to generate 1789.86 times less return on investment than Midsummer. But when comparing it to its historical volatility, Eolus Vind AB is 2.58 times less risky than Midsummer. It trades about 0.0 of its potential returns per unit of risk. Midsummer AB is currently generating about 0.18 of returns per unit of risk over similar time horizon. If you would invest 94.00 in Midsummer AB on September 23, 2024 and sell it today you would earn a total of 54.00 from holding Midsummer AB or generate 57.45% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Very Weak |
Accuracy | 100.0% |
Values | Daily Returns |
Eolus Vind AB vs. Midsummer AB
Performance |
Timeline |
Eolus Vind AB |
Midsummer AB |
Eolus Vind and Midsummer Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Eolus Vind and Midsummer
The main advantage of trading using opposite Eolus Vind and Midsummer positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Eolus Vind position performs unexpectedly, Midsummer 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 Midsummer will offset losses from the drop in Midsummer's long position.Eolus Vind vs. Skanska AB | Eolus Vind vs. Sweco AB | Eolus Vind vs. Sweco AB | Eolus Vind vs. Bravida Holding AB |
Midsummer vs. Eolus Vind AB | Midsummer vs. Sinch AB | Midsummer vs. Embracer Group AB | Midsummer vs. Powercell Sweden |
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 Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.
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