Correlation Between AlzChem Group and SCANDMEDICAL SOLDK-040
Can any of the company-specific risk be diversified away by investing in both AlzChem Group and SCANDMEDICAL SOLDK-040 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 AlzChem Group and SCANDMEDICAL SOLDK-040 into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between AlzChem Group AG and SCANDMEDICAL SOLDK 040, you can compare the effects of market volatilities on AlzChem Group and SCANDMEDICAL SOLDK-040 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 AlzChem Group with a short position of SCANDMEDICAL SOLDK-040. Check out your portfolio center. Please also check ongoing floating volatility patterns of AlzChem Group and SCANDMEDICAL SOLDK-040.
Diversification Opportunities for AlzChem Group and SCANDMEDICAL SOLDK-040
-0.2 | Correlation Coefficient |
Good diversification
The 3 months correlation between AlzChem and SCANDMEDICAL is -0.2. Overlapping area represents the amount of risk that can be diversified away by holding AlzChem Group AG 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 AlzChem Group 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 AlzChem Group AG are associated (or correlated) with SCANDMEDICAL SOLDK-040. 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 AlzChem Group i.e., AlzChem Group and SCANDMEDICAL SOLDK-040 go up and down completely randomly.
Pair Corralation between AlzChem Group and SCANDMEDICAL SOLDK-040
Assuming the 90 days trading horizon AlzChem Group AG is expected to generate 0.31 times more return on investment than SCANDMEDICAL SOLDK-040. However, AlzChem Group AG is 3.2 times less risky than SCANDMEDICAL SOLDK-040. It trades about 0.12 of its potential returns per unit of risk. SCANDMEDICAL SOLDK 040 is currently generating about 0.02 per unit of risk. If you would invest 1,668 in AlzChem Group AG on October 11, 2024 and sell it today you would earn a total of 4,412 from holding AlzChem Group AG or generate 264.51% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 99.8% |
| Values | Daily Returns |
AlzChem Group AG vs. SCANDMEDICAL SOLDK 040
Performance |
| Timeline |
| AlzChem Group AG |
| SCANDMEDICAL SOLDK 040 |
AlzChem Group and SCANDMEDICAL SOLDK-040 Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with AlzChem Group and SCANDMEDICAL SOLDK-040
The main advantage of trading using opposite AlzChem Group and SCANDMEDICAL SOLDK-040 positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AlzChem Group position performs unexpectedly, SCANDMEDICAL SOLDK-040 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-040 will offset losses from the drop in SCANDMEDICAL SOLDK-040's long position.| AlzChem Group vs. SCANDMEDICAL SOLDK 040 | AlzChem Group vs. Highlight Communications AG | AlzChem Group vs. CVR Medical Corp | AlzChem Group vs. Cogent Communications Holdings |
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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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.
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