Correlation Between Corline Biomedical and Fram Skandinavien
Can any of the company-specific risk be diversified away by investing in both Corline Biomedical and Fram Skandinavien 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 Corline Biomedical and Fram Skandinavien into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Corline Biomedical AB and Fram Skandinavien AB, you can compare the effects of market volatilities on Corline Biomedical and Fram Skandinavien 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 Corline Biomedical with a short position of Fram Skandinavien. Check out your portfolio center. Please also check ongoing floating volatility patterns of Corline Biomedical and Fram Skandinavien.
Diversification Opportunities for Corline Biomedical and Fram Skandinavien
0.6 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Corline and Fram is 0.6. Overlapping area represents the amount of risk that can be diversified away by holding Corline Biomedical AB and Fram Skandinavien AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fram Skandinavien and Corline Biomedical 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 Corline Biomedical AB are associated (or correlated) with Fram Skandinavien. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fram Skandinavien has no effect on the direction of Corline Biomedical i.e., Corline Biomedical and Fram Skandinavien go up and down completely randomly.
Pair Corralation between Corline Biomedical and Fram Skandinavien
Assuming the 90 days trading horizon Corline Biomedical AB is expected to generate 1.53 times more return on investment than Fram Skandinavien. However, Corline Biomedical is 1.53 times more volatile than Fram Skandinavien AB. It trades about 0.34 of its potential returns per unit of risk. Fram Skandinavien AB is currently generating about 0.01 per unit of risk. If you would invest 648.00 in Corline Biomedical AB on September 18, 2024 and sell it today you would earn a total of 184.00 from holding Corline Biomedical AB or generate 28.4% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 95.45% |
| Values | Daily Returns |
Corline Biomedical AB vs. Fram Skandinavien AB
Performance |
| Timeline |
| Corline Biomedical |
| Fram Skandinavien |
Corline Biomedical and Fram Skandinavien Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Corline Biomedical and Fram Skandinavien
The main advantage of trading using opposite Corline Biomedical and Fram Skandinavien positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Corline Biomedical position performs unexpectedly, Fram Skandinavien 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 Fram Skandinavien will offset losses from the drop in Fram Skandinavien's long position.| Corline Biomedical vs. Bavarian Nordic | Corline Biomedical vs. BioPorto | Corline Biomedical vs. Zaptec AS | Corline Biomedical vs. cBrain AS |
| Fram Skandinavien vs. Svenska Aerogel Holding | Fram Skandinavien vs. Acarix AS | Fram Skandinavien vs. Clean Motion AB | Fram Skandinavien vs. Episurf Medical 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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.
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