Correlation Between Miko NV and ABO

Can any of the company-specific risk be diversified away by investing in both Miko NV and ABO 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 Miko NV and ABO into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Miko NV and ABO Group, you can compare the effects of market volatilities on Miko NV and ABO 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 Miko NV with a short position of ABO. Check out your portfolio center. Please also check ongoing floating volatility patterns of Miko NV and ABO.

Diversification Opportunities for Miko NV and ABO

-0.05

Correlation Coefficient

Miko NV  ABO

Good diversification

The 3 months correlation between Miko and ABO is -0.05. Overlapping area represents the amount of risk that can be diversified away by holding Miko NV and ABO Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ABO Group and Miko NV 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 Miko NV are associated (or correlated) with ABO. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ABO Group has no effect on the direction of Miko NV i.e., Miko NV and ABO go up and down completely randomly.

Pair Corralation between Miko NV and ABO

Assuming the 90 days trading horizon Miko NV is expected to generate 2.47 times more return on investment than ABO. However, Miko NV is 2.47 times more volatile than ABO Group. It trades about 0.32 of its potential returns per unit of risk. ABO Group is currently generating about 0.13 per unit of risk. If you would invest  5,120  in Miko NV on October 10, 2024 and sell it today you would earn a total of  840.00  from holding Miko NV or generate 16.41% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Miko NV  vs.  ABO Group

Miko NV

Risk-Adjusted Performance

12 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Miko NV are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. Even with relatively weak basic indicators, Miko NV reported solid returns over the last few months and may actually be approaching a breakup point.

ABO Group

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days ABO Group has generated negative risk-adjusted returns adding no value to investors with long positions. Even with weak performance in the last few months, the Stock's basic indicators remain relatively invariable which may send shares a bit higher in February 2025. The latest agitation may also be a sign of long-running up-swing for the enterprise retail investors.

Pair Trading with Miko NV and ABO

The main advantage of trading using opposite Miko NV and ABO positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Miko NV position performs unexpectedly, ABO 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 ABO will offset losses from the drop in ABO's long position.

The idea behind Miko NV and ABO Group pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.