Correlation Between Episurf Medical and Northbaze Group
Can any of the company-specific risk be diversified away by investing in both Episurf Medical and Northbaze Group 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 Episurf Medical and Northbaze Group into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Episurf Medical AB and Northbaze Group AB, you can compare the effects of market volatilities on Episurf Medical and Northbaze Group 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 Episurf Medical with a short position of Northbaze Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of Episurf Medical and Northbaze Group.
Diversification Opportunities for Episurf Medical and Northbaze Group
0.39 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Episurf and Northbaze is 0.39. Overlapping area represents the amount of risk that can be diversified away by holding Episurf Medical AB and Northbaze Group AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Northbaze Group AB and Episurf Medical 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 Episurf Medical AB are associated (or correlated) with Northbaze Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Northbaze Group AB has no effect on the direction of Episurf Medical i.e., Episurf Medical and Northbaze Group go up and down completely randomly.
Pair Corralation between Episurf Medical and Northbaze Group
Assuming the 90 days trading horizon Episurf Medical AB is expected to under-perform the Northbaze Group. But the stock apears to be less risky and, when comparing its historical volatility, Episurf Medical AB is 1.86 times less risky than Northbaze Group. The stock trades about -0.1 of its potential returns per unit of risk. The Northbaze Group AB is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest 40.00 in Northbaze Group AB on September 5, 2024 and sell it today you would lose (23.00) from holding Northbaze Group AB or give up 57.5% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Episurf Medical AB vs. Northbaze Group AB
Performance |
| Timeline |
| Episurf Medical AB |
| Northbaze Group AB |
Episurf Medical and Northbaze Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Episurf Medical and Northbaze Group
The main advantage of trading using opposite Episurf Medical and Northbaze Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Episurf Medical position performs unexpectedly, Northbaze Group 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 Northbaze Group will offset losses from the drop in Northbaze Group's long position.| Episurf Medical vs. BioInvent International AB | Episurf Medical vs. Cantargia AB | Episurf Medical vs. Bonesupport Holding AB | Episurf Medical vs. Bactiguard Holding AB |
| Northbaze Group vs. Anoto Group AB | Northbaze Group vs. Bong AB | Northbaze Group vs. Episurf Medical AB | Northbaze Group vs. Eniro 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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.
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