Correlation Between ChemoMetec and ISS AS
Can any of the company-specific risk be diversified away by investing in both ChemoMetec and ISS AS 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 ISS AS into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ChemoMetec AS and ISS AS, you can compare the effects of market volatilities on ChemoMetec and ISS AS 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 ISS AS. Check out your portfolio center. Please also check ongoing floating volatility patterns of ChemoMetec and ISS AS.
Diversification Opportunities for ChemoMetec and ISS AS
-0.55 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between ChemoMetec and ISS is -0.55. Overlapping area represents the amount of risk that can be diversified away by holding ChemoMetec AS and ISS AS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ISS 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 ISS AS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ISS AS has no effect on the direction of ChemoMetec i.e., ChemoMetec and ISS AS go up and down completely randomly.
Pair Corralation between ChemoMetec and ISS AS
Assuming the 90 days trading horizon ChemoMetec AS is expected to generate 1.95 times more return on investment than ISS AS. However, ChemoMetec is 1.95 times more volatile than ISS AS. It trades about 0.13 of its potential returns per unit of risk. ISS AS is currently generating about -0.06 per unit of risk. If you would invest 49,100 in ChemoMetec AS on October 21, 2024 and sell it today you would earn a total of 3,100 from holding ChemoMetec AS or generate 6.31% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
ChemoMetec AS vs. ISS AS
Performance |
| Timeline |
| ChemoMetec AS |
| ISS AS |
ChemoMetec and ISS AS Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ChemoMetec and ISS AS
The main advantage of trading using opposite ChemoMetec and ISS AS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ChemoMetec position performs unexpectedly, ISS AS 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 ISS AS will offset losses from the drop in ISS AS's long position.| ChemoMetec vs. cBrain AS | ChemoMetec vs. Ambu AS | ChemoMetec vs. Genmab AS | ChemoMetec vs. Zealand Pharma 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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
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