Correlation Between ChemoMetec and H Lundbeck
Can any of the company-specific risk be diversified away by investing in both ChemoMetec and H Lundbeck 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 ChemoMetec and H Lundbeck into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ChemoMetec AS and H Lundbeck AS, you can compare the effects of market volatilities on ChemoMetec and H Lundbeck 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 ChemoMetec with a short position of H Lundbeck. Check out your portfolio center. Please also check ongoing floating volatility patterns of ChemoMetec and H Lundbeck.
Diversification Opportunities for ChemoMetec and H Lundbeck
-0.45 | Correlation Coefficient |
Very good diversification
The 3 months correlation between ChemoMetec and HLUN-B is -0.45. Overlapping area represents the amount of risk that can be diversified away by holding ChemoMetec AS and H Lundbeck AS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on H Lundbeck AS and ChemoMetec 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 ChemoMetec AS are associated (or correlated) with H Lundbeck. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of H Lundbeck AS has no effect on the direction of ChemoMetec i.e., ChemoMetec and H Lundbeck go up and down completely randomly.
Pair Corralation between ChemoMetec and H Lundbeck
Assuming the 90 days trading horizon ChemoMetec AS is expected to generate 2.72 times more return on investment than H Lundbeck. However, ChemoMetec is 2.72 times more volatile than H Lundbeck AS. It trades about 0.05 of its potential returns per unit of risk. H Lundbeck AS is currently generating about 0.05 per unit of risk. If you would invest 33,000 in ChemoMetec AS on September 1, 2024 and sell it today you would earn a total of 14,360 from holding ChemoMetec AS or generate 43.52% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 99.63% |
| Values | Daily Returns |
ChemoMetec AS vs. H Lundbeck AS
Performance |
| Timeline |
| ChemoMetec AS |
| H Lundbeck AS |
ChemoMetec and H Lundbeck Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ChemoMetec and H Lundbeck
The main advantage of trading using opposite ChemoMetec and H Lundbeck positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ChemoMetec position performs unexpectedly, H Lundbeck 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 H Lundbeck will offset losses from the drop in H Lundbeck's long position.| ChemoMetec vs. cBrain AS | ChemoMetec vs. Ambu AS | ChemoMetec vs. Genmab AS | ChemoMetec vs. Zealand Pharma AS |
| H Lundbeck vs. H Lundbeck AS | H Lundbeck vs. GN Store Nord | H Lundbeck vs. FLSmidth Co | H Lundbeck vs. ALK Abell AS |
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 Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
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