Correlation Between Upsales Technology and Midsummer

Can any of the company-specific risk be diversified away by investing in both Upsales Technology and Midsummer 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 Midsummer 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 Midsummer AB, you can compare the effects of market volatilities on Upsales Technology and Midsummer 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 Midsummer. Check out your portfolio center. Please also check ongoing floating volatility patterns of Upsales Technology and Midsummer.

Diversification Opportunities for Upsales Technology and Midsummer

-0.14

Correlation Coefficient

Upsales Technology  Midsummer

Good diversification

The 3 months correlation between Upsales and Midsummer is -0.14. Overlapping area represents the amount of risk that can be diversified away by holding Upsales Technology AB and Midsummer AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Midsummer 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 Midsummer. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Midsummer AB has no effect on the direction of Upsales Technology i.e., Upsales Technology and Midsummer go up and down completely randomly.

Pair Corralation between Upsales Technology and Midsummer

Assuming the 90 days trading horizon Upsales Technology AB is expected to generate 0.66 times more return on investment than Midsummer. However, Upsales Technology AB is 1.51 times less risky than Midsummer. It trades about -0.06 of its potential returns per unit of risk. Midsummer AB is currently generating about -0.37 per unit of risk. If you would invest  3,340  in Upsales Technology AB on October 9, 2024 and sell it today you would lose (140.00) from holding Upsales Technology AB or give up 4.19% of portfolio value over 90 days.

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

Upsales Technology AB  vs.  Midsummer AB

Upsales Technology

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Upsales Technology AB has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, Upsales Technology is not utilizing all of its potentials. The newest stock price disturbance, may contribute to short-term losses for the investors.

Midsummer AB

Risk-Adjusted Performance

10 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Midsummer AB are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, Midsummer unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Upsales Technology and Midsummer

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

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