Correlation Between NCAB and MilDef Group

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

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

Diversification Opportunities for NCAB and MilDef Group

-0.68

Correlation Coefficient

NCAB  MilDef Group

Excellent diversification

The 3 months correlation between NCAB and MilDef is -0.68. Overlapping area represents the amount of risk that can be diversified away by holding NCAB Group and MilDef Group AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MilDef Group AB and NCAB 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 NCAB Group are associated (or correlated) with MilDef Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MilDef Group AB has no effect on the direction of NCAB i.e., NCAB and MilDef Group go up and down completely randomly.

Pair Corralation between NCAB and MilDef Group

Assuming the 90 days trading horizon NCAB Group is expected to generate 0.92 times more return on investment than MilDef Group. However, NCAB Group is 1.08 times less risky than MilDef Group. It trades about 0.07 of its potential returns per unit of risk. MilDef Group AB is currently generating about -0.09 per unit of risk. If you would invest  4,728  in NCAB Group on April 23, 2025 and sell it today you would earn a total of  612.00  from holding NCAB Group or generate 12.94% return on investment over 90 days.

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

NCAB Group  vs.  MilDef Group AB

NCAB Group

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in NCAB Group are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, NCAB unveiled solid returns over the last few months and may actually be approaching a breakup point.

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.

Pair Trading with NCAB and MilDef Group

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

The idea behind NCAB Group and MilDef 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.

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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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.