Correlation Between CodeMill and Opter AB

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

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

Diversification Opportunities for CodeMill and Opter AB

-0.2

Correlation Coefficient

CodeMill  Opter AB

Good diversification

The 3 months correlation between CodeMill and Opter is -0.2. Overlapping area represents the amount of risk that can be diversified away by holding CodeMill AB and Opter AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Opter AB and CodeMill 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 CodeMill AB are associated (or correlated) with Opter AB. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Opter AB has no effect on the direction of CodeMill i.e., CodeMill and Opter AB go up and down completely randomly.

Pair Corralation between CodeMill and Opter AB

Assuming the 90 days trading horizon CodeMill AB is expected to generate 1.22 times more return on investment than Opter AB. However, CodeMill is 1.22 times more volatile than Opter AB. It trades about 0.16 of its potential returns per unit of risk. Opter AB is currently generating about 0.08 per unit of risk. If you would invest  1,506  in CodeMill AB on April 20, 2025 and sell it today you would earn a total of  264.00  from holding CodeMill AB or generate 17.53% return on investment over 90 days.

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

CodeMill AB  vs.  Opter AB

CodeMill AB

Risk-Adjusted Performance

Good

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

Opter AB

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Opter AB are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, Opter AB may actually be approaching a critical reversion point that can send shares even higher in August 2025.

Pair Trading with CodeMill and Opter AB

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

The idea behind CodeMill AB and Opter 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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.