Correlation Between Stille AB and Promimic

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

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

Diversification Opportunities for Stille AB and Promimic

-0.53

Correlation Coefficient

Stille AB  Promimic

Excellent diversification

The 3 months correlation between Stille and Promimic is -0.53. Overlapping area represents the amount of risk that can be diversified away by holding Stille AB and Promimic AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Promimic AB and Stille AB 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 Stille 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 Stille AB i.e., Stille AB and Promimic go up and down completely randomly.

Pair Corralation between Stille AB and Promimic

Assuming the 90 days trading horizon Stille AB is expected to generate 0.42 times more return on investment than Promimic. However, Stille AB is 2.41 times less risky than Promimic. It trades about 0.05 of its potential returns per unit of risk. Promimic AB is currently generating about -0.03 per unit of risk. If you would invest  21,100  in Stille AB on April 21, 2025 and sell it today you would earn a total of  1,400  from holding Stille AB or generate 6.64% return on investment over 90 days.

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

Stille AB  vs.  Promimic AB

Stille AB

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Stille AB are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, Stille AB may actually be approaching a critical reversion point that can send shares even higher in August 2025.

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 conflicting 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 Stille AB and Promimic

The main advantage of trading using opposite Stille AB and Promimic positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Stille AB 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 Stille 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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.