Correlation Between Ellen AB and Mendus AB
Can any of the company-specific risk be diversified away by investing in both Ellen AB and Mendus 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 Ellen AB and Mendus AB into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ellen AB and Mendus AB, you can compare the effects of market volatilities on Ellen AB and Mendus 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 Ellen AB with a short position of Mendus AB. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ellen AB and Mendus AB.
Diversification Opportunities for Ellen AB and Mendus AB
Very weak diversification
The 3 months correlation between Ellen and Mendus is 0.44. Overlapping area represents the amount of risk that can be diversified away by holding Ellen AB and Mendus AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mendus AB and Ellen 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 Ellen AB are associated (or correlated) with Mendus AB. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mendus AB has no effect on the direction of Ellen AB i.e., Ellen AB and Mendus AB go up and down completely randomly.
Pair Corralation between Ellen AB and Mendus AB
Assuming the 90 days trading horizon Ellen AB is expected to under-perform the Mendus AB. But the stock apears to be less risky and, when comparing its historical volatility, Ellen AB is 1.37 times less risky than Mendus AB. The stock trades about -0.07 of its potential returns per unit of risk. The Mendus AB is currently generating about -0.02 of returns per unit of risk over similar time horizon. If you would invest 989.00 in Mendus AB on September 1, 2024 and sell it today you would lose (141.00) from holding Mendus AB or give up 14.26% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Ellen AB vs. Mendus AB
Performance |
| Timeline |
| Ellen AB |
| Mendus AB |
Ellen AB and Mendus AB Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ellen AB and Mendus AB
The main advantage of trading using opposite Ellen AB and Mendus AB positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ellen AB position performs unexpectedly, Mendus 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 Mendus AB will offset losses from the drop in Mendus AB's long position.The idea behind Ellen AB and Mendus AB 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.| Mendus AB vs. Cantargia AB | Mendus AB vs. BioInvent International AB | Mendus AB vs. Alligator Bioscience AB | Mendus AB vs. Moberg Pharma 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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.
Other Complementary Tools
| Correlation Analysis Reduce portfolio risk simply by holding instruments which are not perfectly correlated | |
| Stock Tickers Use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites | |
| Positions Ratings Determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Commodity Directory Find actively traded commodities issued by global exchanges | |
| Cryptocurrency Center Build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency |