Correlation Between Novotek AB and Proact IT
Can any of the company-specific risk be diversified away by investing in both Novotek AB and Proact IT 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 Novotek AB and Proact IT into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Novotek AB and Proact IT Group, you can compare the effects of market volatilities on Novotek AB and Proact IT 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 Novotek AB with a short position of Proact IT. Check out your portfolio center. Please also check ongoing floating volatility patterns of Novotek AB and Proact IT.
Diversification Opportunities for Novotek AB and Proact IT
-0.15 | Correlation Coefficient |
Good diversification
The 3 months correlation between Novotek and Proact is -0.15. Overlapping area represents the amount of risk that can be diversified away by holding Novotek AB and Proact IT Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Proact IT Group and Novotek 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 Novotek AB are associated (or correlated) with Proact IT. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Proact IT Group has no effect on the direction of Novotek AB i.e., Novotek AB and Proact IT go up and down completely randomly.
Pair Corralation between Novotek AB and Proact IT
Assuming the 90 days trading horizon Novotek AB is expected to generate 5.63 times less return on investment than Proact IT. But when comparing it to its historical volatility, Novotek AB is 1.08 times less risky than Proact IT. It trades about 0.04 of its potential returns per unit of risk. Proact IT Group is currently generating about 0.21 of returns per unit of risk over similar time horizon. If you would invest 8,860 in Proact IT Group on October 10, 2025 and sell it today you would earn a total of 2,620 from holding Proact IT Group or generate 29.57% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Novotek AB vs. Proact IT Group
Performance |
| Timeline |
| Novotek AB |
| Proact IT Group |
Novotek AB and Proact IT Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Novotek AB and Proact IT
The main advantage of trading using opposite Novotek AB and Proact IT positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Novotek AB position performs unexpectedly, Proact IT 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 Proact IT will offset losses from the drop in Proact IT's long position.| Novotek AB vs. Prevas AB | Novotek AB vs. CAG Group AB | Novotek AB vs. CombinedX AB | Novotek AB vs. Fractal Gaming Group |
| Proact IT vs. Dustin Group AB | Proact IT vs. Know IT AB | Proact IT vs. Exsitec Holding AB | Proact IT vs. Softronic AB |
Check out your portfolio center.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.
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