Correlation Between Photocat and Insplorion

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

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

Diversification Opportunities for Photocat and Insplorion

-0.72

Correlation Coefficient

Photocat  Insplorion

Pay attention - limited upside

The 3 months correlation between Photocat and Insplorion is -0.72. Overlapping area represents the amount of risk that can be diversified away by holding Photocat AS and Insplorion AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Insplorion AB and Photocat 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 Photocat AS are associated (or correlated) with Insplorion. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Insplorion AB has no effect on the direction of Photocat i.e., Photocat and Insplorion go up and down completely randomly.

Pair Corralation between Photocat and Insplorion

Assuming the 90 days trading horizon Photocat AS is expected to generate 0.26 times more return on investment than Insplorion. However, Photocat AS is 3.9 times less risky than Insplorion. It trades about 0.13 of its potential returns per unit of risk. Insplorion AB is currently generating about -0.06 per unit of risk. If you would invest  850.00  in Photocat AS on April 22, 2025 and sell it today you would earn a total of  95.00  from holding Photocat AS or generate 11.18% return on investment over 90 days.

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

Photocat AS  vs.  Insplorion AB

Photocat AS

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Photocat AS are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, Photocat may actually be approaching a critical reversion point that can send shares even higher in August 2025.

Insplorion AB

Risk-Adjusted Performance

Very Weak

Over the last 90 days Insplorion 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 Photocat and Insplorion

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

The idea behind Photocat AS and Insplorion 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 Portfolio File Import module to quickly import all of your third-party portfolios from your local drive in csv format.