Correlation Between Eolus Vind and Mycronic Publ

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

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

Diversification Opportunities for Eolus Vind and Mycronic Publ

-0.39

Correlation Coefficient

Eolus Vind  Mycronic Publ

Very good diversification

The 3 months correlation between Eolus and Mycronic is -0.39. Overlapping area represents the amount of risk that can be diversified away by holding Eolus Vind 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 Eolus Vind 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 Eolus Vind 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 Eolus Vind i.e., Eolus Vind and Mycronic Publ go up and down completely randomly.

Pair Corralation between Eolus Vind and Mycronic Publ

Assuming the 90 days trading horizon Eolus Vind AB is expected to under-perform the Mycronic Publ. In addition to that, Eolus Vind is 1.1 times more volatile than Mycronic publ AB. It trades about -0.03 of its total potential returns per unit of risk. Mycronic publ AB is currently generating about 0.07 per unit of volatility. If you would invest  36,300  in Mycronic publ AB on September 4, 2024 and sell it today you would earn a total of  3,040  from holding Mycronic publ AB or generate 8.37% return on investment over 90 days.

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

Eolus Vind AB  vs.  Mycronic publ AB

Eolus Vind AB

Risk-Adjusted Performance

0 of 100

Very Weak

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

Mycronic publ AB

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Mycronic publ AB are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively weak basic indicators, Mycronic Publ may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with Eolus Vind and Mycronic Publ

The main advantage of trading using opposite Eolus Vind and Mycronic Publ positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Eolus Vind 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 Eolus Vind 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 Portfolio Dashboard module to portfolio dashboard that provides centralized access to all your investments.