Correlation Between AroCell AB and Mendus AB
Can any of the company-specific risk be diversified away by investing in both AroCell AB and Mendus AB 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 AroCell AB and Mendus AB into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between AroCell AB and Mendus AB, you can compare the effects of market volatilities on AroCell AB and Mendus AB 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 AroCell AB with a short position of Mendus AB. Check out your portfolio center. Please also check ongoing floating volatility patterns of AroCell AB and Mendus AB.
Diversification Opportunities for AroCell AB and Mendus AB
-0.25 | Correlation Coefficient |
Very good diversification
The 3 months correlation between AroCell and Mendus is -0.25. Overlapping area represents the amount of risk that can be diversified away by holding AroCell AB and Mendus AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mendus AB and AroCell AB 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 AroCell AB are associated (or correlated) with Mendus AB. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mendus AB has no effect on the direction of AroCell AB i.e., AroCell AB and Mendus AB go up and down completely randomly.
Pair Corralation between AroCell AB and Mendus AB
Assuming the 90 days trading horizon AroCell AB is expected to under-perform the Mendus AB. In addition to that, AroCell AB is 1.74 times more volatile than Mendus AB. It trades about -0.06 of its total potential returns per unit of risk. Mendus AB is currently generating about -0.06 per unit of volatility. If you would invest 950.00 in Mendus AB on September 13, 2024 and sell it today you would lose (51.00) from holding Mendus AB or give up 5.37% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
AroCell AB vs. Mendus AB
Performance |
| Timeline |
| AroCell AB |
| Mendus AB |
AroCell AB and Mendus AB Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with AroCell AB and Mendus AB
The main advantage of trading using opposite AroCell AB and Mendus AB positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AroCell AB position performs unexpectedly, Mendus AB 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 Mendus AB will offset losses from the drop in Mendus AB's long position.| AroCell AB vs. Mendus AB | AroCell AB vs. Cantargia AB | AroCell AB vs. BioInvent International AB | AroCell AB vs. Isofol Medical AB |
| Mendus AB vs. Cantargia AB | Mendus AB vs. BioInvent International AB | Mendus AB vs. Alligator Bioscience AB | Mendus AB vs. Moberg Pharma 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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.
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