Correlation Between SEDANA MEDICAL and Enter Air
Can any of the company-specific risk be diversified away by investing in both SEDANA MEDICAL and Enter Air 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 SEDANA MEDICAL and Enter Air into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SEDANA MEDICAL AB and Enter Air SA, you can compare the effects of market volatilities on SEDANA MEDICAL and Enter Air 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 SEDANA MEDICAL with a short position of Enter Air. Check out your portfolio center. Please also check ongoing floating volatility patterns of SEDANA MEDICAL and Enter Air.
Diversification Opportunities for SEDANA MEDICAL and Enter Air
-0.49 | Correlation Coefficient |
Very good diversification
The 3 months correlation between SEDANA and Enter is -0.49. Overlapping area represents the amount of risk that can be diversified away by holding SEDANA MEDICAL AB and Enter Air SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Enter Air SA and SEDANA MEDICAL 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 SEDANA MEDICAL AB are associated (or correlated) with Enter Air. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Enter Air SA has no effect on the direction of SEDANA MEDICAL i.e., SEDANA MEDICAL and Enter Air go up and down completely randomly.
Pair Corralation between SEDANA MEDICAL and Enter Air
Assuming the 90 days trading horizon SEDANA MEDICAL AB is expected to under-perform the Enter Air. But the stock apears to be less risky and, when comparing its historical volatility, SEDANA MEDICAL AB is 1.05 times less risky than Enter Air. The stock trades about -0.04 of its potential returns per unit of risk. The Enter Air SA is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 851.00 in Enter Air SA on September 13, 2024 and sell it today you would earn a total of 373.00 from holding Enter Air SA or generate 43.83% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 99.22% |
| Values | Daily Returns |
SEDANA MEDICAL AB vs. Enter Air SA
Performance |
| Timeline |
| SEDANA MEDICAL AB |
| Enter Air SA |
SEDANA MEDICAL and Enter Air Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SEDANA MEDICAL and Enter Air
The main advantage of trading using opposite SEDANA MEDICAL and Enter Air positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SEDANA MEDICAL position performs unexpectedly, Enter Air 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 Enter Air will offset losses from the drop in Enter Air's long position.| SEDANA MEDICAL vs. CHINA EDUCATION GROUP | SEDANA MEDICAL vs. THAI BEVERAGE | SEDANA MEDICAL vs. CAREER EDUCATION | SEDANA MEDICAL vs. MCEWEN MINING INC |
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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.
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