Correlation Between Advanced Medical and Sparebank
Can any of the company-specific risk be diversified away by investing in both Advanced Medical and Sparebank 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 Advanced Medical and Sparebank into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Advanced Medical Solutions and Sparebank 1 SR, you can compare the effects of market volatilities on Advanced Medical and Sparebank 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 Advanced Medical with a short position of Sparebank. Check out your portfolio center. Please also check ongoing floating volatility patterns of Advanced Medical and Sparebank.
Diversification Opportunities for Advanced Medical and Sparebank
0.44 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Advanced and Sparebank is 0.44. Overlapping area represents the amount of risk that can be diversified away by holding Advanced Medical Solutions and Sparebank 1 SR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sparebank 1 SR and Advanced Medical 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 Advanced Medical Solutions are associated (or correlated) with Sparebank. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sparebank 1 SR has no effect on the direction of Advanced Medical i.e., Advanced Medical and Sparebank go up and down completely randomly.
Pair Corralation between Advanced Medical and Sparebank
Assuming the 90 days trading horizon Advanced Medical Solutions is expected to generate 2.07 times more return on investment than Sparebank. However, Advanced Medical is 2.07 times more volatile than Sparebank 1 SR. It trades about 0.06 of its potential returns per unit of risk. Sparebank 1 SR is currently generating about 0.08 per unit of risk. If you would invest 20,800 in Advanced Medical Solutions on November 27, 2024 and sell it today you would earn a total of 450.00 from holding Advanced Medical Solutions or generate 2.16% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Advanced Medical Solutions vs. Sparebank 1 SR
Performance |
| Timeline |
| Advanced Medical Sol |
| Sparebank 1 SR |
Advanced Medical and Sparebank Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Advanced Medical and Sparebank
The main advantage of trading using opposite Advanced Medical and Sparebank positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Advanced Medical position performs unexpectedly, Sparebank 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 Sparebank will offset losses from the drop in Sparebank's long position.| Advanced Medical vs. International Biotechnology Trust | Advanced Medical vs. Ashtead Technology Holdings | Advanced Medical vs. Clean Power Hydrogen | Advanced Medical vs. Ross Stores |
| Sparebank vs. Verizon Communications | Sparebank vs. Cairo Communication SpA | Sparebank vs. Livermore Investments Group | Sparebank vs. Bigblu Broadband PLC |
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 Portfolio Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
Other Complementary Tools
| Price Transformation Use Price Transformation models to analyze the depth of different equity instruments across global markets | |
| Sectors List of equity sectors categorizing publicly traded companies based on their primary business activities | |
| Options Analysis Analyze and evaluate options and option chains as a potential hedge for your portfolios | |
| Commodity Directory Find actively traded commodities issued by global exchanges | |
| Bond Analysis Evaluate and analyze corporate bonds as a potential investment for your portfolios. |