Correlation Between Exsitec Holding and Modelon AB

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

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

Diversification Opportunities for Exsitec Holding and Modelon AB

0.05

Correlation Coefficient

Exsitec Holding  Modelon AB

Significant diversification

The 3 months correlation between Exsitec and Modelon is 0.05. Overlapping area represents the amount of risk that can be diversified away by holding Exsitec Holding AB and Modelon AB Cl in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Modelon AB Cl and Exsitec Holding 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 Exsitec Holding AB are associated (or correlated) with Modelon AB. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Modelon AB Cl has no effect on the direction of Exsitec Holding i.e., Exsitec Holding and Modelon AB go up and down completely randomly.

Pair Corralation between Exsitec Holding and Modelon AB

Assuming the 90 days trading horizon Exsitec Holding AB is expected to under-perform the Modelon AB. But the stock apears to be less risky and, when comparing its historical volatility, Exsitec Holding AB is 1.47 times less risky than Modelon AB. The stock trades about -0.18 of its potential returns per unit of risk. The Modelon AB Cl is currently generating about -0.01 of returns per unit of risk over similar time horizon. If you would invest  1,170  in Modelon AB Cl on September 5, 2024 and sell it today you would lose (60.00) from holding Modelon AB Cl or give up 5.13% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	96.88%
Values	Daily Returns

Exsitec Holding AB  vs.  Modelon AB Cl

Exsitec Holding AB

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Exsitec Holding 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 basic indicators remain comparatively stable which may send shares a bit higher in January 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Modelon AB Cl

Risk-Adjusted Performance

0 of 100

Very Weak

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

Pair Trading with Exsitec Holding and Modelon AB

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

The idea behind Exsitec Holding AB and Modelon AB Cl 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 Center module to all portfolio management and optimization tools to improve performance of your portfolios.