Correlation Between Vitrolife and Mycronic Publ

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

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

Diversification Opportunities for Vitrolife and Mycronic Publ

-0.23

Correlation Coefficient

Vitrolife  Mycronic Publ

Very good diversification

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

Pair Corralation between Vitrolife and Mycronic Publ

Assuming the 90 days trading horizon Vitrolife AB is expected to under-perform the Mycronic Publ. But the stock apears to be less risky and, when comparing its historical volatility, Vitrolife AB is 1.06 times less risky than Mycronic Publ. The stock trades about -0.07 of its potential returns per unit of risk. The Mycronic publ AB is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest  37,500  in Mycronic publ AB on September 2, 2024 and sell it today you would earn a total of  1,160  from holding Mycronic publ AB or generate 3.09% return on investment over 90 days.

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

Vitrolife AB  vs.  Mycronic publ AB

Vitrolife AB

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Vitrolife AB has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest uncertain performance, the Stock's basic indicators remain stable and the newest uproar on Wall Street may also be a sign of mid-term gains for the firm private investors.

Mycronic publ AB

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Mycronic publ AB are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable basic indicators, Mycronic Publ 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 Vitrolife and Mycronic Publ

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

The idea behind Vitrolife AB and Mycronic publ 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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.