Correlation Between Proact IT and Exsitec Holding

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

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

Diversification Opportunities for Proact IT and Exsitec Holding

-0.65

Correlation Coefficient

Proact IT  Exsitec Holding

Excellent diversification

The 3 months correlation between Proact and Exsitec is -0.65. Overlapping area represents the amount of risk that can be diversified away by holding Proact IT Group and Exsitec Holding AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Exsitec Holding AB and Proact IT 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 Proact IT Group are associated (or correlated) with Exsitec Holding. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Exsitec Holding AB has no effect on the direction of Proact IT i.e., Proact IT and Exsitec Holding go up and down completely randomly.

Pair Corralation between Proact IT and Exsitec Holding

Assuming the 90 days trading horizon Proact IT Group is expected to under-perform the Exsitec Holding. But the stock apears to be less risky and, when comparing its historical volatility, Proact IT Group is 1.03 times less risky than Exsitec Holding. The stock trades about -0.11 of its potential returns per unit of risk. The Exsitec Holding AB is currently generating about 0.21 of returns per unit of risk over similar time horizon. If you would invest  10,840  in Exsitec Holding AB on April 22, 2025 and sell it today you would earn a total of  2,660  from holding Exsitec Holding AB or generate 24.54% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	98.39%
Values	Daily Returns

Proact IT Group  vs.  Exsitec Holding AB

Proact IT Group

Risk-Adjusted Performance

Very Weak

Over the last 90 days Proact IT Group 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.

Exsitec Holding AB

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Exsitec Holding AB are ranked lower than 16 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively weak basic indicators, Exsitec Holding unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Proact IT and Exsitec Holding

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

The idea behind Proact IT Group and Exsitec Holding 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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.