Correlation Between Midsummer and Cint Group

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

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

Diversification Opportunities for Midsummer and Cint Group

0.02

Correlation Coefficient

Midsummer  Cint Group

Significant diversification

The 3 months correlation between Midsummer and Cint is 0.02. Overlapping area represents the amount of risk that can be diversified away by holding Midsummer AB and Cint Group AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cint Group AB and Midsummer 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 Midsummer AB are associated (or correlated) with Cint Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cint Group AB has no effect on the direction of Midsummer i.e., Midsummer and Cint Group go up and down completely randomly.

Pair Corralation between Midsummer and Cint Group

Assuming the 90 days trading horizon Midsummer is expected to generate 1.56 times less return on investment than Cint Group. In addition to that, Midsummer is 1.14 times more volatile than Cint Group AB. It trades about 0.09 of its total potential returns per unit of risk. Cint Group AB is currently generating about 0.16 per unit of volatility. If you would invest  862.00  in Cint Group AB on September 3, 2024 and sell it today you would earn a total of  391.00  from holding Cint Group AB or generate 45.36% return on investment over 90 days.

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

Midsummer AB  vs.  Cint Group AB

Midsummer AB

Risk-Adjusted Performance

7 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Midsummer AB are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, Midsummer unveiled solid returns over the last few months and may actually be approaching a breakup point.

Cint Group AB

Risk-Adjusted Performance

12 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Cint Group AB are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively weak basic indicators, Cint Group unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Midsummer and Cint Group

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

The idea behind Midsummer AB and Cint Group 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 Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.