Correlation Between Swedencare Publ and MIPS AB

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

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

Diversification Opportunities for Swedencare Publ and MIPS AB

-0.06

Correlation Coefficient

Swedencare Publ  MIPS AB

Good diversification

The 3 months correlation between Swedencare and MIPS is -0.06. Overlapping area represents the amount of risk that can be diversified away by holding Swedencare publ AB and MIPS AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MIPS AB and Swedencare Publ 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 Swedencare publ AB are associated (or correlated) with MIPS AB. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MIPS AB has no effect on the direction of Swedencare Publ i.e., Swedencare Publ and MIPS AB go up and down completely randomly.

Pair Corralation between Swedencare Publ and MIPS AB

Assuming the 90 days trading horizon Swedencare publ AB is expected to under-perform the MIPS AB. In addition to that, Swedencare Publ is 1.21 times more volatile than MIPS AB. It trades about -0.09 of its total potential returns per unit of risk. MIPS AB is currently generating about 0.03 per unit of volatility. If you would invest  47,860  in MIPS AB on November 30, 2024 and sell it today you would earn a total of  1,040  from holding MIPS AB or generate 2.17% return on investment over 90 days.

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

Swedencare publ AB  vs.  MIPS AB

Swedencare publ AB

Risk-Adjusted Performance

Very Weak

Over the last 90 days Swedencare publ AB has generated negative risk-adjusted returns adding no value to investors with long positions. Despite uncertain performance in the last few months, the Stock's fundamental indicators remain somewhat strong which may send shares a bit higher in March 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

MIPS AB

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in MIPS AB are ranked lower than 2 (%) 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 current stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with Swedencare Publ and MIPS AB

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

The idea behind Swedencare publ AB and MIPS 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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .