Correlation Between Promimic and RaySearch Laboratories

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

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

Diversification Opportunities for Promimic and RaySearch Laboratories

-0.83

Correlation Coefficient

Promimic  RaySearch Laboratories

Pay attention - limited upside

The 3 months correlation between Promimic and RaySearch is -0.83. Overlapping area represents the amount of risk that can be diversified away by holding Promimic AB and RaySearch Laboratories AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on RaySearch Laboratories and Promimic 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 Promimic AB are associated (or correlated) with RaySearch Laboratories. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of RaySearch Laboratories has no effect on the direction of Promimic i.e., Promimic and RaySearch Laboratories go up and down completely randomly.

Pair Corralation between Promimic and RaySearch Laboratories

Assuming the 90 days trading horizon Promimic AB is expected to under-perform the RaySearch Laboratories. In addition to that, Promimic is 1.61 times more volatile than RaySearch Laboratories AB. It trades about -0.02 of its total potential returns per unit of risk. RaySearch Laboratories AB is currently generating about 0.18 per unit of volatility. If you would invest  23,664  in RaySearch Laboratories AB on April 24, 2025 and sell it today you would earn a total of  11,986  from holding RaySearch Laboratories AB or generate 50.65% return on investment over 90 days.

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

Promimic AB  vs.  RaySearch Laboratories AB

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 latest uncertain performance, the Stock's basic indicators remain stable and the newest uproar on Wall Street may also be a sign of mid-term gains for the firm private investors.

RaySearch Laboratories

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in RaySearch Laboratories AB are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively unfluctuating basic indicators, RaySearch Laboratories unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Promimic and RaySearch Laboratories

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

The idea behind Promimic AB and RaySearch Laboratories 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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.