Correlation Between Moberg Pharma and I Tech

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

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

Diversification Opportunities for Moberg Pharma and I Tech

-0.47

Correlation Coefficient

Moberg Pharma  I Tech

Very good diversification

The 3 months correlation between Moberg and ITECH is -0.47. Overlapping area represents the amount of risk that can be diversified away by holding Moberg Pharma AB and I Tech in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on I Tech and Moberg Pharma 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 Moberg Pharma AB are associated (or correlated) with I Tech. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of I Tech has no effect on the direction of Moberg Pharma i.e., Moberg Pharma and I Tech go up and down completely randomly.

Pair Corralation between Moberg Pharma and I Tech

Assuming the 90 days trading horizon Moberg Pharma AB is expected to under-perform the I Tech. In addition to that, Moberg Pharma is 4.15 times more volatile than I Tech. It trades about -0.19 of its total potential returns per unit of risk. I Tech is currently generating about 0.49 per unit of volatility. If you would invest  4,520  in I Tech on September 23, 2024 and sell it today you would earn a total of  1,280  from holding I Tech or generate 28.32% return on investment over 90 days.

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

Moberg Pharma AB  vs.  I Tech

Moberg Pharma AB

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Moberg Pharma AB are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain fundamental drivers, Moberg Pharma unveiled solid returns over the last few months and may actually be approaching a breakup point.

I Tech

Risk-Adjusted Performance

7 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in I Tech are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, I Tech unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Moberg Pharma and I Tech

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

The idea behind Moberg Pharma AB and I Tech 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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.