Correlation Between MIPS AB and Thule Group

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

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

Diversification Opportunities for MIPS AB and Thule Group

0.45

Correlation Coefficient

MIPS AB  Thule Group

Very weak diversification

The 3 months correlation between MIPS and Thule is 0.45. Overlapping area represents the amount of risk that can be diversified away by holding MIPS AB and Thule Group AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Thule Group AB and MIPS 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 MIPS AB are associated (or correlated) with Thule Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Thule Group AB has no effect on the direction of MIPS AB i.e., MIPS AB and Thule Group go up and down completely randomly.

Pair Corralation between MIPS AB and Thule Group

Assuming the 90 days trading horizon MIPS AB is expected to under-perform the Thule Group. In addition to that, MIPS AB is 1.18 times more volatile than Thule Group AB. It trades about -0.11 of its total potential returns per unit of risk. Thule Group AB is currently generating about -0.03 per unit of volatility. If you would invest  35,720  in Thule Group AB on November 29, 2024 and sell it today you would lose (480.00) from holding Thule Group AB or give up 1.34% of portfolio value over 90 days.

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

MIPS AB  vs.  Thule Group AB

MIPS AB

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in MIPS AB are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable basic indicators, MIPS AB is not utilizing all of its potentials. The newest stock price uproar, may contribute to short-horizon losses for the private investors.

Thule Group AB

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Thule Group AB are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable basic indicators, Thule Group is not utilizing all of its potentials. The newest stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with MIPS AB and Thule Group

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

The idea behind MIPS AB and Thule Group AB 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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.