Correlation Between Nilsson Special and Upsales Technology

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

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

Diversification Opportunities for Nilsson Special and Upsales Technology

0.04

Correlation Coefficient

Nilsson Special  Upsales Technology

Significant diversification

The 3 months correlation between Nilsson and Upsales is 0.04. Overlapping area represents the amount of risk that can be diversified away by holding Nilsson Special Vehicles and Upsales Technology AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Upsales Technology and Nilsson Special 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 Nilsson Special Vehicles are associated (or correlated) with Upsales Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Upsales Technology has no effect on the direction of Nilsson Special i.e., Nilsson Special and Upsales Technology go up and down completely randomly.

Pair Corralation between Nilsson Special and Upsales Technology

Assuming the 90 days trading horizon Nilsson Special is expected to generate 2.75 times less return on investment than Upsales Technology. In addition to that, Nilsson Special is 2.65 times more volatile than Upsales Technology AB. It trades about 0.01 of its total potential returns per unit of risk. Upsales Technology AB is currently generating about 0.1 per unit of volatility. If you would invest  2,980  in Upsales Technology AB on December 29, 2024 and sell it today you would earn a total of  520.00  from holding Upsales Technology AB or generate 17.45% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	98.39%
Values	Daily Returns

Nilsson Special Vehicles  vs.  Upsales Technology AB

Nilsson Special Vehicles

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Nilsson Special Vehicles are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively weak basic indicators, Nilsson Special may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Upsales Technology

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Upsales Technology AB are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. Despite somewhat uncertain basic indicators, Upsales Technology sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Nilsson Special and Upsales Technology

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

The idea behind Nilsson Special Vehicles and Upsales Technology 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.

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 Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.