Correlation Between Upsales Technology and Nordic Asia

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

Diversification Opportunities for Upsales Technology and Nordic Asia

-0.2

Correlation Coefficient

Upsales Technology  Nordic Asia

Good diversification

The 3 months correlation between Upsales and Nordic is -0.2. Overlapping area represents the amount of risk that can be diversified away by holding Upsales Technology AB and Nordic Asia Investment in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nordic Asia Investment 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 Nordic Asia. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nordic Asia Investment has no effect on the direction of Upsales Technology i.e., Upsales Technology and Nordic Asia go up and down completely randomly.

Pair Corralation between Upsales Technology and Nordic Asia

Assuming the 90 days trading horizon Upsales Technology AB is expected to generate 0.93 times more return on investment than Nordic Asia. However, Upsales Technology AB is 1.07 times less risky than Nordic Asia. It trades about 0.07 of its potential returns per unit of risk. Nordic Asia Investment is currently generating about -0.07 per unit of risk. If you would invest  3,300  in Upsales Technology AB on December 3, 2024 and sell it today you would earn a total of  200.00  from holding Upsales Technology AB or generate 6.06% 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.  Nordic Asia Investment

Upsales Technology

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Upsales Technology AB are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. Despite somewhat uncertain basic indicators, Upsales Technology may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Nordic Asia Investment

Risk-Adjusted Performance

Very Weak

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

Pair Trading with Upsales Technology and Nordic Asia

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

The idea behind Upsales Technology AB and Nordic Asia Investment 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 Portfolio File Import module to quickly import all of your third-party portfolios from your local drive in csv format.