Correlation Between Probi AB and RaySearch Laboratories

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

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

Diversification Opportunities for Probi AB and RaySearch Laboratories

0.0

Correlation Coefficient

Probi AB  RaySearch Laboratories

Pay attention - limited upside

The 3 months correlation between Probi and RaySearch is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Probi AB and RaySearch Laboratories AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on RaySearch Laboratories and Probi AB 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 Probi AB are associated (or correlated) with RaySearch Laboratories. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of RaySearch Laboratories has no effect on the direction of Probi AB i.e., Probi AB and RaySearch Laboratories go up and down completely randomly.

Pair Corralation between Probi AB and RaySearch Laboratories

If you would invest  15,080  in RaySearch Laboratories AB on September 4, 2024 and sell it today you would earn a total of  6,220  from holding RaySearch Laboratories AB or generate 41.25% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

Probi AB  vs.  RaySearch Laboratories AB

Probi AB

Risk-Adjusted Performance

0 of 100

Modest

Over the last 90 days Probi AB has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, Probi AB is not utilizing all of its potentials. The current stock price uproar, may contribute to short-horizon losses for the private investors.

RaySearch Laboratories

Risk-Adjusted Performance

15 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in RaySearch Laboratories AB are ranked lower than 15 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively weak basic indicators, RaySearch Laboratories unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Probi AB and RaySearch Laboratories

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

The idea behind Probi AB and RaySearch Laboratories 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.