Correlation Between Episurf Medical and Paxman AB
Can any of the company-specific risk be diversified away by investing in both Episurf Medical and Paxman 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 Episurf Medical and Paxman AB 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 Paxman AB, you can compare the effects of market volatilities on Episurf Medical and Paxman 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 Episurf Medical with a short position of Paxman AB. Check out your portfolio center. Please also check ongoing floating volatility patterns of Episurf Medical and Paxman AB.
Diversification Opportunities for Episurf Medical and Paxman AB
-0.24 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Episurf and Paxman is -0.24. Overlapping area represents the amount of risk that can be diversified away by holding Episurf Medical AB and Paxman AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Paxman 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 Paxman AB. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Paxman AB has no effect on the direction of Episurf Medical i.e., Episurf Medical and Paxman AB go up and down completely randomly.
Pair Corralation between Episurf Medical and Paxman AB
Assuming the 90 days trading horizon Episurf Medical AB is expected to under-perform the Paxman AB. In addition to that, Episurf Medical is 1.59 times more volatile than Paxman AB. It trades about -0.01 of its total potential returns per unit of risk. Paxman AB is currently generating about 0.16 per unit of volatility. If you would invest 5,740 in Paxman AB on August 28, 2024 and sell it today you would earn a total of 1,240 from holding Paxman AB or generate 21.6% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Episurf Medical AB vs. Paxman AB
Performance |
| Timeline |
| Episurf Medical AB |
| Paxman AB |
Episurf Medical and Paxman AB Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Episurf Medical and Paxman AB
The main advantage of trading using opposite Episurf Medical and Paxman AB positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Episurf Medical position performs unexpectedly, Paxman 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 Paxman AB will offset losses from the drop in Paxman AB'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 |
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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 Portfolio Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.
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