Correlation Between Exmar NV and Sequana Medical
Can any of the company-specific risk be diversified away by investing in both Exmar NV and Sequana 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 Exmar NV and Sequana Medical into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Exmar NV and Sequana Medical NV, you can compare the effects of market volatilities on Exmar NV and Sequana 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 Exmar NV with a short position of Sequana Medical. Check out your portfolio center. Please also check ongoing floating volatility patterns of Exmar NV and Sequana Medical.
Diversification Opportunities for Exmar NV and Sequana Medical
-0.35 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Exmar and Sequana is -0.35. Overlapping area represents the amount of risk that can be diversified away by holding Exmar NV and Sequana Medical NV in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sequana Medical NV and Exmar NV 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 Exmar NV are associated (or correlated) with Sequana Medical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sequana Medical NV has no effect on the direction of Exmar NV i.e., Exmar NV and Sequana Medical go up and down completely randomly.
Pair Corralation between Exmar NV and Sequana Medical
Assuming the 90 days trading horizon Exmar NV is expected to generate 0.4 times more return on investment than Sequana Medical. However, Exmar NV is 2.47 times less risky than Sequana Medical. It trades about 0.06 of its potential returns per unit of risk. Sequana Medical NV is currently generating about -0.03 per unit of risk. If you would invest 515.00 in Exmar NV on August 30, 2024 and sell it today you would earn a total of 305.00 from holding Exmar NV or generate 59.22% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Exmar NV vs. Sequana Medical NV
Performance |
| Timeline |
| Exmar NV |
| Sequana Medical NV |
Exmar NV and Sequana Medical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Exmar NV and Sequana Medical
The main advantage of trading using opposite Exmar NV and Sequana Medical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Exmar NV position performs unexpectedly, Sequana 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 Sequana Medical will offset losses from the drop in Sequana Medical's long position.| Exmar NV vs. EVS Broadcast Equipment | Exmar NV vs. NV Bekaert SA | Exmar NV vs. Tessenderlo | Exmar NV vs. Melexis NV |
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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