Correlation Between Midsona AB and SenzaGen

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

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

Diversification Opportunities for Midsona AB and SenzaGen

-0.28

Correlation Coefficient

Midsona AB  SenzaGen

Very good diversification

The 3 months correlation between Midsona and SenzaGen is -0.28. Overlapping area represents the amount of risk that can be diversified away by holding Midsona AB and SenzaGen AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SenzaGen AB and Midsona 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 Midsona AB are associated (or correlated) with SenzaGen. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SenzaGen AB has no effect on the direction of Midsona AB i.e., Midsona AB and SenzaGen go up and down completely randomly.

Pair Corralation between Midsona AB and SenzaGen

Assuming the 90 days trading horizon Midsona AB is expected to generate 0.99 times more return on investment than SenzaGen. However, Midsona AB is 1.01 times less risky than SenzaGen. It trades about 0.05 of its potential returns per unit of risk. SenzaGen AB is currently generating about -0.15 per unit of risk. If you would invest  830.00  in Midsona AB on December 2, 2024 and sell it today you would earn a total of  56.00  from holding Midsona AB or generate 6.75% return on investment over 90 days.

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

Midsona AB  vs.  SenzaGen AB

Midsona AB

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Midsona AB are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Despite somewhat uncertain basic indicators, Midsona AB may actually be approaching a critical reversion point that can send shares even higher in April 2025.

SenzaGen AB

Risk-Adjusted Performance

Very Weak

Over the last 90 days SenzaGen AB has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of weak performance in the last few months, the Stock's basic indicators remain comparatively stable which may send shares a bit higher in April 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Pair Trading with Midsona AB and SenzaGen

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

The idea behind Midsona AB and SenzaGen 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 Bonds Directory module to find actively traded corporate debentures issued by US companies.