Correlation Between Abbott Laboratories and SCANDMEDICAL SOLDK
Can any of the company-specific risk be diversified away by investing in both Abbott Laboratories and SCANDMEDICAL SOLDK 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 Abbott Laboratories and SCANDMEDICAL SOLDK into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Abbott Laboratories and SCANDMEDICAL SOLDK 040, you can compare the effects of market volatilities on Abbott Laboratories and SCANDMEDICAL SOLDK 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 Abbott Laboratories with a short position of SCANDMEDICAL SOLDK. Check out your portfolio center. Please also check ongoing floating volatility patterns of Abbott Laboratories and SCANDMEDICAL SOLDK.
Diversification Opportunities for Abbott Laboratories and SCANDMEDICAL SOLDK
-0.33 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Abbott and SCANDMEDICAL is -0.33. Overlapping area represents the amount of risk that can be diversified away by holding Abbott Laboratories and SCANDMEDICAL SOLDK 040 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SCANDMEDICAL SOLDK 040 and Abbott Laboratories 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 Abbott Laboratories are associated (or correlated) with SCANDMEDICAL SOLDK. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SCANDMEDICAL SOLDK 040 has no effect on the direction of Abbott Laboratories i.e., Abbott Laboratories and SCANDMEDICAL SOLDK go up and down completely randomly.
Pair Corralation between Abbott Laboratories and SCANDMEDICAL SOLDK
Assuming the 90 days trading horizon Abbott Laboratories is expected to generate 0.66 times more return on investment than SCANDMEDICAL SOLDK. However, Abbott Laboratories is 1.51 times less risky than SCANDMEDICAL SOLDK. It trades about -0.12 of its potential returns per unit of risk. SCANDMEDICAL SOLDK 040 is currently generating about -0.52 per unit of risk. If you would invest 11,204 in Abbott Laboratories on September 23, 2024 and sell it today you would lose (238.00) from holding Abbott Laboratories or give up 2.12% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Abbott Laboratories vs. SCANDMEDICAL SOLDK 040
Performance |
| Timeline |
| Abbott Laboratories |
| SCANDMEDICAL SOLDK 040 |
Abbott Laboratories and SCANDMEDICAL SOLDK Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Abbott Laboratories and SCANDMEDICAL SOLDK
The main advantage of trading using opposite Abbott Laboratories and SCANDMEDICAL SOLDK positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Abbott Laboratories position performs unexpectedly, SCANDMEDICAL SOLDK 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 SCANDMEDICAL SOLDK will offset losses from the drop in SCANDMEDICAL SOLDK's long position.| Abbott Laboratories vs. Abbott Laboratories | Abbott Laboratories vs. Medtronic PLC | Abbott Laboratories vs. Stryker | Abbott Laboratories vs. Boston Scientific |
| SCANDMEDICAL SOLDK vs. Abbott Laboratories | SCANDMEDICAL SOLDK vs. Abbott Laboratories | SCANDMEDICAL SOLDK vs. Medtronic PLC | SCANDMEDICAL SOLDK vs. Stryker |
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 Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
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