Correlation Between Logistea A and MIPS AB

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

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

Diversification Opportunities for Logistea A and MIPS AB

0.36

Correlation Coefficient

Logistea A  MIPS AB

Weak diversification

The 3 months correlation between Logistea and MIPS is 0.36. Overlapping area represents the amount of risk that can be diversified away by holding Logistea A and MIPS AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MIPS AB and Logistea A 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 Logistea A are associated (or correlated) with MIPS AB. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MIPS AB has no effect on the direction of Logistea A i.e., Logistea A and MIPS AB go up and down completely randomly.

Pair Corralation between Logistea A and MIPS AB

Assuming the 90 days trading horizon Logistea A is expected to generate 2.07 times less return on investment than MIPS AB. But when comparing it to its historical volatility, Logistea A is 1.23 times less risky than MIPS AB. It trades about 0.09 of its potential returns per unit of risk. MIPS AB is currently generating about 0.16 of returns per unit of risk over similar time horizon. If you would invest  32,915  in MIPS AB on April 24, 2025 and sell it today you would earn a total of  8,945  from holding MIPS AB or generate 27.18% return on investment over 90 days.

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

Logistea A  vs.  MIPS AB

Logistea A

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Logistea A are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. Despite somewhat uncertain technical and fundamental indicators, Logistea A sustained solid returns over the last few months and may actually be approaching a breakup point.

MIPS AB

Risk-Adjusted Performance

Good

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

Pair Trading with Logistea A and MIPS AB

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

The idea behind Logistea A and MIPS 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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.