Correlation Between MilDef Group and Promimic

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

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

Diversification Opportunities for MilDef Group and Promimic

0.46

Correlation Coefficient

MilDef Group  Promimic

Very weak diversification

The 3 months correlation between MilDef and Promimic is 0.46. Overlapping area represents the amount of risk that can be diversified away by holding MilDef Group AB and Promimic AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Promimic AB and MilDef Group 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 MilDef Group AB are associated (or correlated) with Promimic. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Promimic AB has no effect on the direction of MilDef Group i.e., MilDef Group and Promimic go up and down completely randomly.

Pair Corralation between MilDef Group and Promimic

Assuming the 90 days trading horizon MilDef Group AB is expected to under-perform the Promimic. But the stock apears to be less risky and, when comparing its historical volatility, MilDef Group AB is 1.59 times less risky than Promimic. The stock trades about -0.09 of its potential returns per unit of risk. The Promimic AB is currently generating about -0.03 of returns per unit of risk over similar time horizon. If you would invest  2,400  in Promimic AB on April 21, 2025 and sell it today you would lose (550.00) from holding Promimic AB or give up 22.92% of portfolio value over 90 days.

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

MilDef Group AB  vs.  Promimic AB

MilDef Group AB

Risk-Adjusted Performance

Very Weak

Over the last 90 days MilDef Group AB has generated negative risk-adjusted returns adding no value to investors with long positions. Despite uncertain performance in the last few months, the Stock's essential indicators remain somewhat strong which may send shares a bit higher in August 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Promimic AB

Risk-Adjusted Performance

Very Weak

Over the last 90 days Promimic AB 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 August 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Pair Trading with MilDef Group and Promimic

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

The idea behind MilDef Group AB and Promimic 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 Transaction History module to view history of all your transactions and understand their impact on performance.