Correlation Between Profoto Holding and Soder Sportfiske

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

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

Diversification Opportunities for Profoto Holding and Soder Sportfiske

-0.42

Correlation Coefficient

Profoto Holding  Soder Sportfiske

Very good diversification

The 3 months correlation between Profoto and Soder is -0.42. Overlapping area represents the amount of risk that can be diversified away by holding Profoto Holding AB and Soder Sportfiske AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Soder Sportfiske and Profoto Holding 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 Profoto Holding AB are associated (or correlated) with Soder Sportfiske. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Soder Sportfiske has no effect on the direction of Profoto Holding i.e., Profoto Holding and Soder Sportfiske go up and down completely randomly.

Pair Corralation between Profoto Holding and Soder Sportfiske

Assuming the 90 days trading horizon Profoto Holding AB is expected to under-perform the Soder Sportfiske. But the stock apears to be less risky and, when comparing its historical volatility, Profoto Holding AB is 1.27 times less risky than Soder Sportfiske. The stock trades about -0.1 of its potential returns per unit of risk. The Soder Sportfiske AB is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest  2,578  in Soder Sportfiske AB on May 4, 2025 and sell it today you would earn a total of  232.00  from holding Soder Sportfiske AB or generate 9.0% return on investment over 90 days.

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

Profoto Holding AB  vs.  Soder Sportfiske AB

Profoto Holding AB

Risk-Adjusted Performance

Very Weak

Over the last 90 days Profoto Holding 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 September 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Soder Sportfiske

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Soder Sportfiske AB are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively weak basic indicators, Soder Sportfiske may actually be approaching a critical reversion point that can send shares even higher in September 2025.

Pair Trading with Profoto Holding and Soder Sportfiske

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

The idea behind Profoto Holding AB and Soder Sportfiske 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 Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.