Correlation Between AcadeMedia and Redsense Medical
Can any of the company-specific risk be diversified away by investing in both AcadeMedia and Redsense Medical 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 AcadeMedia and Redsense Medical into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between AcadeMedia AB and Redsense Medical AB, you can compare the effects of market volatilities on AcadeMedia and Redsense Medical 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 AcadeMedia with a short position of Redsense Medical. Check out your portfolio center. Please also check ongoing floating volatility patterns of AcadeMedia and Redsense Medical.
Diversification Opportunities for AcadeMedia and Redsense Medical
0.13 | Correlation Coefficient |
Average diversification
The 3 months correlation between AcadeMedia and Redsense is 0.13. Overlapping area represents the amount of risk that can be diversified away by holding AcadeMedia AB and Redsense Medical AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Redsense Medical and AcadeMedia 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 AcadeMedia AB are associated (or correlated) with Redsense Medical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Redsense Medical has no effect on the direction of AcadeMedia i.e., AcadeMedia and Redsense Medical go up and down completely randomly.
Pair Corralation between AcadeMedia and Redsense Medical
Assuming the 90 days trading horizon AcadeMedia AB is expected to generate 0.33 times more return on investment than Redsense Medical. However, AcadeMedia AB is 2.99 times less risky than Redsense Medical. It trades about 0.05 of its potential returns per unit of risk. Redsense Medical AB is currently generating about 0.0 per unit of risk. If you would invest 4,834 in AcadeMedia AB on August 26, 2024 and sell it today you would earn a total of 1,346 from holding AcadeMedia AB or generate 27.84% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 98.99% |
| Values | Daily Returns |
AcadeMedia AB vs. Redsense Medical AB
Performance |
| Timeline |
| AcadeMedia AB |
| Redsense Medical |
AcadeMedia and Redsense Medical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with AcadeMedia and Redsense Medical
The main advantage of trading using opposite AcadeMedia and Redsense Medical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AcadeMedia position performs unexpectedly, Redsense Medical 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 Redsense Medical will offset losses from the drop in Redsense Medical's long position.| AcadeMedia vs. Inwido AB | AcadeMedia vs. Alimak Hek Group | AcadeMedia vs. Dometic Group AB | AcadeMedia vs. Byggmax Group AB |
| Redsense Medical vs. Addtech AB | Redsense Medical vs. Lifco AB | Redsense Medical vs. Indutrade AB | Redsense Medical vs. Lagercrantz Group 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 Equity Valuation module to check real value of public entities based on technical and fundamental data.
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