Correlation Between Clinical Laserthermia and Creades AB
Can any of the company-specific risk be diversified away by investing in both Clinical Laserthermia and Creades 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 Clinical Laserthermia and Creades AB into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Clinical Laserthermia Systems and Creades AB, you can compare the effects of market volatilities on Clinical Laserthermia and Creades 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 Clinical Laserthermia with a short position of Creades AB. Check out your portfolio center. Please also check ongoing floating volatility patterns of Clinical Laserthermia and Creades AB.
Diversification Opportunities for Clinical Laserthermia and Creades AB
0.03 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Clinical and Creades is 0.03. Overlapping area represents the amount of risk that can be diversified away by holding Clinical Laserthermia Systems and Creades AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Creades AB and Clinical Laserthermia 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 Clinical Laserthermia Systems are associated (or correlated) with Creades AB. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Creades AB has no effect on the direction of Clinical Laserthermia i.e., Clinical Laserthermia and Creades AB go up and down completely randomly.
Pair Corralation between Clinical Laserthermia and Creades AB
Assuming the 90 days trading horizon Clinical Laserthermia Systems is expected to under-perform the Creades AB. In addition to that, Clinical Laserthermia is 3.43 times more volatile than Creades AB. It trades about -0.03 of its total potential returns per unit of risk. Creades AB is currently generating about -0.02 per unit of volatility. If you would invest 8,473 in Creades AB on August 31, 2024 and sell it today you would lose (1,543) from holding Creades AB or give up 18.21% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Clinical Laserthermia Systems vs. Creades AB
Performance |
| Timeline |
| Clinical Laserthermia |
| Creades AB |
Clinical Laserthermia and Creades AB Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Clinical Laserthermia and Creades AB
The main advantage of trading using opposite Clinical Laserthermia and Creades AB positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Clinical Laserthermia position performs unexpectedly, Creades 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 Creades AB will offset losses from the drop in Creades AB's long position.| Clinical Laserthermia vs. Cantargia AB | Clinical Laserthermia vs. Episurf Medical AB | Clinical Laserthermia vs. Karolinska Development AB | Clinical Laserthermia vs. Acarix AS |
| Creades AB vs. Investor AB ser | Creades AB vs. Investment AB Latour | Creades AB vs. Industrivarden AB ser | Creades AB vs. Tele2 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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
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