Correlation Between Theradiag and Sensorion
Can any of the company-specific risk be diversified away by investing in both Theradiag and Sensorion 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 Theradiag and Sensorion into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Theradiag SA and Sensorion SA, you can compare the effects of market volatilities on Theradiag and Sensorion 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 Theradiag with a short position of Sensorion. Check out your portfolio center. Please also check ongoing floating volatility patterns of Theradiag and Sensorion.
Diversification Opportunities for Theradiag and Sensorion
Modest diversification
The 3 months correlation between Theradiag and Sensorion is 0.25. Overlapping area represents the amount of risk that can be diversified away by holding Theradiag SA and Sensorion SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sensorion SA and Theradiag 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 Theradiag SA are associated (or correlated) with Sensorion. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sensorion SA has no effect on the direction of Theradiag i.e., Theradiag and Sensorion go up and down completely randomly.
Pair Corralation between Theradiag and Sensorion
Assuming the 90 days trading horizon Theradiag SA is expected to under-perform the Sensorion. In addition to that, Theradiag is 2.04 times more volatile than Sensorion SA. It trades about -0.09 of its total potential returns per unit of risk. Sensorion SA is currently generating about -0.18 per unit of volatility. If you would invest 70.00 in Sensorion SA on August 31, 2024 and sell it today you would lose (6.00) from holding Sensorion SA or give up 8.57% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 95.65% |
| Values | Daily Returns |
Theradiag SA vs. Sensorion SA
Performance |
| Timeline |
| Theradiag SA |
| Sensorion SA |
Theradiag and Sensorion Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Theradiag and Sensorion
The main advantage of trading using opposite Theradiag and Sensorion positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Theradiag position performs unexpectedly, Sensorion 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 Sensorion will offset losses from the drop in Sensorion's long position.The idea behind Theradiag SA and Sensorion SA pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| 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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.
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