Correlation Between Sensorion and Adocia
Can any of the company-specific risk be diversified away by investing in both Sensorion and Adocia 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 Sensorion and Adocia into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Sensorion SA and Adocia, you can compare the effects of market volatilities on Sensorion and Adocia 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 Sensorion with a short position of Adocia. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sensorion and Adocia.
Diversification Opportunities for Sensorion and Adocia
Very weak diversification
The 3 months correlation between Sensorion and Adocia is 0.48. Overlapping area represents the amount of risk that can be diversified away by holding Sensorion SA and Adocia in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Adocia and Sensorion 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 Sensorion SA are associated (or correlated) with Adocia. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Adocia has no effect on the direction of Sensorion i.e., Sensorion and Adocia go up and down completely randomly.
Pair Corralation between Sensorion and Adocia
Assuming the 90 days trading horizon Sensorion is expected to generate 1.39 times less return on investment than Adocia. But when comparing it to its historical volatility, Sensorion SA is 1.3 times less risky than Adocia. It trades about 0.05 of its potential returns per unit of risk. Adocia is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 313.00 in Adocia on November 1, 2024 and sell it today you would earn a total of 275.00 from holding Adocia or generate 87.86% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sensorion SA vs. Adocia
Performance |
| Timeline |
| Sensorion SA |
| Adocia |
Sensorion and Adocia Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sensorion and Adocia
The main advantage of trading using opposite Sensorion and Adocia positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sensorion position performs unexpectedly, Adocia 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 Adocia will offset losses from the drop in Adocia's long position.| Sensorion vs. Poxel SA | Sensorion vs. Quantum Genomics SA | Sensorion vs. Biophytis SA | Sensorion vs. Gensight Biologics SA |
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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.
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