Correlation Between Episurf Medical and Redsense Medical
Can any of the company-specific risk be diversified away by investing in both Episurf Medical and Redsense Medical 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 Redsense Medical 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 Redsense Medical AB, you can compare the effects of market volatilities on Episurf Medical and Redsense Medical 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 Redsense Medical. Check out your portfolio center. Please also check ongoing floating volatility patterns of Episurf Medical and Redsense Medical.
Diversification Opportunities for Episurf Medical and Redsense Medical
-0.41 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Episurf and Redsense is -0.41. Overlapping area represents the amount of risk that can be diversified away by holding Episurf Medical AB and Redsense Medical AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Redsense Medical 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 Redsense Medical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Redsense Medical has no effect on the direction of Episurf Medical i.e., Episurf Medical and Redsense Medical go up and down completely randomly.
Pair Corralation between Episurf Medical and Redsense Medical
Assuming the 90 days trading horizon Episurf Medical is expected to generate 1.06 times less return on investment than Redsense Medical. But when comparing it to its historical volatility, Episurf Medical AB is 1.01 times less risky than Redsense Medical. It trades about 0.03 of its potential returns per unit of risk. Redsense Medical AB is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 698.00 in Redsense Medical AB on August 29, 2024 and sell it today you would earn a total of 2.00 from holding Redsense Medical AB or generate 0.29% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Episurf Medical AB vs. Redsense Medical AB
Performance |
| Timeline |
| Episurf Medical AB |
| Redsense Medical |
Episurf Medical and Redsense Medical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Episurf Medical and Redsense Medical
The main advantage of trading using opposite Episurf Medical and Redsense Medical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Episurf Medical position performs unexpectedly, Redsense Medical 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 Redsense Medical will offset losses from the drop in Redsense Medical's long position.| Episurf Medical vs. Clinical Laserthermia Systems | Episurf Medical vs. KABE Group AB | Episurf Medical vs. IAR Systems Group | Episurf Medical vs. Mekonomen AB |
| Redsense Medical vs. Mantex AB | Redsense Medical vs. Genovis AB | Redsense Medical vs. Vestum AB | Redsense Medical vs. Karolinska Development 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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.
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