Correlation Between Hove AS and Scandinavian Medical
Can any of the company-specific risk be diversified away by investing in both Hove AS and Scandinavian 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 Hove AS and Scandinavian Medical into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Hove AS and Scandinavian Medical Solutions, you can compare the effects of market volatilities on Hove AS and Scandinavian 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 Hove AS with a short position of Scandinavian Medical. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hove AS and Scandinavian Medical.
Diversification Opportunities for Hove AS and Scandinavian Medical
-0.35 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Hove and Scandinavian is -0.35. Overlapping area represents the amount of risk that can be diversified away by holding Hove AS and Scandinavian Medical Solutions in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Scandinavian Medical and Hove AS 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 Hove AS are associated (or correlated) with Scandinavian Medical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Scandinavian Medical has no effect on the direction of Hove AS i.e., Hove AS and Scandinavian Medical go up and down completely randomly.
Pair Corralation between Hove AS and Scandinavian Medical
Assuming the 90 days trading horizon Hove AS is expected to generate 1.09 times more return on investment than Scandinavian Medical. However, Hove AS is 1.09 times more volatile than Scandinavian Medical Solutions. It trades about 0.02 of its potential returns per unit of risk. Scandinavian Medical Solutions is currently generating about 0.01 per unit of risk. If you would invest 330.00 in Hove AS on August 26, 2024 and sell it today you would lose (7.00) from holding Hove AS or give up 2.12% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hove AS vs. Scandinavian Medical Solutions
Performance |
| Timeline |
| Hove AS |
| Scandinavian Medical |
Hove AS and Scandinavian Medical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hove AS and Scandinavian Medical
The main advantage of trading using opposite Hove AS and Scandinavian Medical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hove AS position performs unexpectedly, Scandinavian 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 Scandinavian Medical will offset losses from the drop in Scandinavian Medical's long position.| Hove AS vs. Scandinavian Medical Solutions | Hove AS vs. FOM Technologies AS | Hove AS vs. Shape Robotics AS | Hove AS vs. Dataproces Group AS |
| Scandinavian Medical vs. MapsPeople AS | Scandinavian Medical vs. Penneo AS | Scandinavian Medical vs. Dataproces Group AS | Scandinavian Medical vs. Orderyoyo AS |
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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..
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