Correlation Between Doxa AB and Clinical Laserthermia
Can any of the company-specific risk be diversified away by investing in both Doxa AB and Clinical Laserthermia 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 Doxa AB and Clinical Laserthermia into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Doxa AB and Clinical Laserthermia Systems, you can compare the effects of market volatilities on Doxa AB and Clinical Laserthermia 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 Doxa AB with a short position of Clinical Laserthermia. Check out your portfolio center. Please also check ongoing floating volatility patterns of Doxa AB and Clinical Laserthermia.
Diversification Opportunities for Doxa AB and Clinical Laserthermia
0.51 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Doxa and Clinical is 0.51. Overlapping area represents the amount of risk that can be diversified away by holding Doxa AB and Clinical Laserthermia Systems in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Clinical Laserthermia and Doxa 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 Doxa AB are associated (or correlated) with Clinical Laserthermia. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Clinical Laserthermia has no effect on the direction of Doxa AB i.e., Doxa AB and Clinical Laserthermia go up and down completely randomly.
Pair Corralation between Doxa AB and Clinical Laserthermia
Assuming the 90 days trading horizon Doxa AB is expected to generate 0.17 times more return on investment than Clinical Laserthermia. However, Doxa AB is 5.81 times less risky than Clinical Laserthermia. It trades about -0.18 of its potential returns per unit of risk. Clinical Laserthermia Systems is currently generating about -0.14 per unit of risk. If you would invest 106.00 in Doxa AB on August 24, 2024 and sell it today you would lose (5.00) from holding Doxa AB or give up 4.72% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Doxa AB vs. Clinical Laserthermia Systems
Performance |
| Timeline |
| Doxa AB |
| Clinical Laserthermia |
Doxa AB and Clinical Laserthermia Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Doxa AB and Clinical Laserthermia
The main advantage of trading using opposite Doxa AB and Clinical Laserthermia positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Doxa AB position performs unexpectedly, Clinical Laserthermia 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 Clinical Laserthermia will offset losses from the drop in Clinical Laserthermia's long position.The idea behind Doxa AB and Clinical Laserthermia Systems pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| Clinical Laserthermia vs. Cantargia AB | Clinical Laserthermia vs. Episurf Medical AB | Clinical Laserthermia vs. Karolinska Development AB | Clinical Laserthermia vs. Acarix 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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
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