Correlation Between Elekta AB and CellaVision
Can any of the company-specific risk be diversified away by investing in both Elekta AB and CellaVision 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 Elekta AB and CellaVision into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Elekta AB and CellaVision AB, you can compare the effects of market volatilities on Elekta AB and CellaVision 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 Elekta AB with a short position of CellaVision. Check out your portfolio center. Please also check ongoing floating volatility patterns of Elekta AB and CellaVision.
Diversification Opportunities for Elekta AB and CellaVision
0.79 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Elekta and CellaVision is 0.79. Overlapping area represents the amount of risk that can be diversified away by holding Elekta AB and CellaVision AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CellaVision AB and Elekta 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 Elekta AB are associated (or correlated) with CellaVision. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CellaVision AB has no effect on the direction of Elekta AB i.e., Elekta AB and CellaVision go up and down completely randomly.
Pair Corralation between Elekta AB and CellaVision
Assuming the 90 days trading horizon Elekta AB is expected to generate 1.35 times less return on investment than CellaVision. But when comparing it to its historical volatility, Elekta AB is 1.62 times less risky than CellaVision. It trades about 0.02 of its potential returns per unit of risk. CellaVision AB is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest 20,979 in CellaVision AB on August 29, 2024 and sell it today you would earn a total of 1,171 from holding CellaVision AB or generate 5.58% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Elekta AB vs. CellaVision AB
Performance |
| Timeline |
| Elekta AB |
| CellaVision AB |
Elekta AB and CellaVision Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Elekta AB and CellaVision
The main advantage of trading using opposite Elekta AB and CellaVision positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Elekta AB position performs unexpectedly, CellaVision 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 CellaVision will offset losses from the drop in CellaVision's long position.| Elekta AB vs. Getinge AB ser | Elekta AB vs. AB SKF | Elekta AB vs. ASSA ABLOY AB | Elekta AB vs. Husqvarna AB |
| CellaVision vs. GomSpace Group AB | CellaVision vs. Hansa Biopharma AB | CellaVision vs. Zealand Pharma AS | CellaVision vs. BioInvent International 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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.
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