Correlation Between Elekta AB and Swedish Orphan
Can any of the company-specific risk be diversified away by investing in both Elekta AB and Swedish Orphan 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 Swedish Orphan into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Elekta AB and Swedish Orphan Biovitrum, you can compare the effects of market volatilities on Elekta AB and Swedish Orphan 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 Swedish Orphan. Check out your portfolio center. Please also check ongoing floating volatility patterns of Elekta AB and Swedish Orphan.
Diversification Opportunities for Elekta AB and Swedish Orphan
-0.03 | Correlation Coefficient |
Good diversification
The 3 months correlation between Elekta and Swedish is -0.03. Overlapping area represents the amount of risk that can be diversified away by holding Elekta AB and Swedish Orphan Biovitrum in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Swedish Orphan Biovitrum 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 Swedish Orphan. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Swedish Orphan Biovitrum has no effect on the direction of Elekta AB i.e., Elekta AB and Swedish Orphan go up and down completely randomly.
Pair Corralation between Elekta AB and Swedish Orphan
Assuming the 90 days trading horizon Elekta AB is expected to generate 0.65 times more return on investment than Swedish Orphan. However, Elekta AB is 1.54 times less risky than Swedish Orphan. It trades about -0.09 of its potential returns per unit of risk. Swedish Orphan Biovitrum is currently generating about -0.17 per unit of risk. If you would invest 6,735 in Elekta AB on August 29, 2024 and sell it today you would lose (265.00) from holding Elekta AB or give up 3.93% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Elekta AB vs. Swedish Orphan Biovitrum
Performance |
| Timeline |
| Elekta AB |
| Swedish Orphan Biovitrum |
Elekta AB and Swedish Orphan Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Elekta AB and Swedish Orphan
The main advantage of trading using opposite Elekta AB and Swedish Orphan positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Elekta AB position performs unexpectedly, Swedish Orphan 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 Swedish Orphan will offset losses from the drop in Swedish Orphan'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 |
| Swedish Orphan vs. Getinge AB ser | Swedish Orphan vs. Elekta AB | Swedish Orphan vs. AB SKF | Swedish Orphan vs. Saab 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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
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