Correlation Between Impact Coatings and Minesto AB

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

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

Diversification Opportunities for Impact Coatings and Minesto AB

0.05

Correlation Coefficient

Impact Coatings  Minesto AB

Significant diversification

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

Pair Corralation between Impact Coatings and Minesto AB

Assuming the 90 days trading horizon Impact Coatings publ is expected to under-perform the Minesto AB. But the stock apears to be less risky and, when comparing its historical volatility, Impact Coatings publ is 1.27 times less risky than Minesto AB. The stock trades about -0.1 of its potential returns per unit of risk. The Minesto AB is currently generating about -0.02 of returns per unit of risk over similar time horizon. If you would invest  278.00  in Minesto AB on September 3, 2024 and sell it today you would lose (29.00) from holding Minesto AB or give up 10.43% of portfolio value over 90 days.

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

Impact Coatings publ  vs.  Minesto AB

Impact Coatings publ

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Impact Coatings publ 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.

Minesto AB

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Minesto AB has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, Minesto 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 Impact Coatings and Minesto AB

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

The idea behind Impact Coatings publ and Minesto 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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.