Correlation Between Upsales Technology and Ferronordic

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

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

Diversification Opportunities for Upsales Technology and Ferronordic

-0.23

Correlation Coefficient

Upsales Technology  Ferronordic

Very good diversification

The 3 months correlation between Upsales and Ferronordic is -0.23. Overlapping area represents the amount of risk that can be diversified away by holding Upsales Technology AB and Ferronordic AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ferronordic AB and Upsales Technology 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 Upsales Technology AB are associated (or correlated) with Ferronordic. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ferronordic AB has no effect on the direction of Upsales Technology i.e., Upsales Technology and Ferronordic go up and down completely randomly.

Pair Corralation between Upsales Technology and Ferronordic

Assuming the 90 days trading horizon Upsales Technology AB is expected to generate 1.5 times more return on investment than Ferronordic. However, Upsales Technology is 1.5 times more volatile than Ferronordic AB. It trades about 0.1 of its potential returns per unit of risk. Ferronordic AB is currently generating about -0.11 per unit of risk. If you would invest  2,980  in Upsales Technology AB on December 30, 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 Against
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Upsales Technology AB  vs.  Ferronordic AB

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.

Ferronordic AB

Risk-Adjusted Performance

Very Weak

Over the last 90 days Ferronordic AB has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of uncertain performance in the last few months, the Stock's primary 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 Upsales Technology and Ferronordic

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

The idea behind Upsales Technology AB and Ferronordic 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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.