Correlation Between Midsummer and BIMobject
Can any of the company-specific risk be diversified away by investing in both Midsummer and BIMobject 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 Midsummer and BIMobject into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Midsummer AB and BIMobject AB, you can compare the effects of market volatilities on Midsummer and BIMobject 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 Midsummer with a short position of BIMobject. Check out your portfolio center. Please also check ongoing floating volatility patterns of Midsummer and BIMobject.
Diversification Opportunities for Midsummer and BIMobject
Significant diversification
The 3 months correlation between Midsummer and BIMobject is 0.05. Overlapping area represents the amount of risk that can be diversified away by holding Midsummer AB and BIMobject AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BIMobject AB and Midsummer 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 Midsummer AB are associated (or correlated) with BIMobject. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BIMobject AB has no effect on the direction of Midsummer i.e., Midsummer and BIMobject go up and down completely randomly.
Pair Corralation between Midsummer and BIMobject
Assuming the 90 days trading horizon Midsummer AB is expected to under-perform the BIMobject. In addition to that, Midsummer is 1.91 times more volatile than BIMobject AB. It trades about -0.02 of its total potential returns per unit of risk. BIMobject AB is currently generating about 0.04 per unit of volatility. If you would invest 300.00 in BIMobject AB on September 26, 2024 and sell it today you would earn a total of 150.00 from holding BIMobject AB or generate 50.0% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Insignificant |
Accuracy | 100.0% |
Values | Daily Returns |
Midsummer AB vs. BIMobject AB
Performance |
Timeline |
Midsummer AB |
BIMobject AB |
Midsummer and BIMobject Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Midsummer and BIMobject
The main advantage of trading using opposite Midsummer and BIMobject positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Midsummer position performs unexpectedly, BIMobject 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 BIMobject will offset losses from the drop in BIMobject's long position.Midsummer vs. Eolus Vind AB | Midsummer vs. Sinch AB | Midsummer vs. Embracer Group AB | Midsummer vs. Powercell Sweden |
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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 Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.
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