Correlation Between IAR Systems and Clinical Laserthermia
Can any of the company-specific risk be diversified away by investing in both IAR Systems and Clinical Laserthermia 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 IAR Systems and Clinical Laserthermia into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between IAR Systems Group and Clinical Laserthermia Systems, you can compare the effects of market volatilities on IAR Systems and Clinical Laserthermia 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 IAR Systems with a short position of Clinical Laserthermia. Check out your portfolio center. Please also check ongoing floating volatility patterns of IAR Systems and Clinical Laserthermia.
Diversification Opportunities for IAR Systems and Clinical Laserthermia
0.03 | Correlation Coefficient |
Significant diversification
The 3 months correlation between IAR and Clinical is 0.03. Overlapping area represents the amount of risk that can be diversified away by holding IAR Systems Group and Clinical Laserthermia Systems in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Clinical Laserthermia and IAR Systems 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 IAR Systems Group are associated (or correlated) with Clinical Laserthermia. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Clinical Laserthermia has no effect on the direction of IAR Systems i.e., IAR Systems and Clinical Laserthermia go up and down completely randomly.
Pair Corralation between IAR Systems and Clinical Laserthermia
Assuming the 90 days trading horizon IAR Systems is expected to generate 3.24 times less return on investment than Clinical Laserthermia. But when comparing it to its historical volatility, IAR Systems Group is 1.38 times less risky than Clinical Laserthermia. It trades about 0.03 of its potential returns per unit of risk. Clinical Laserthermia Systems is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 366.00 in Clinical Laserthermia Systems on October 30, 2024 and sell it today you would earn a total of 16.00 from holding Clinical Laserthermia Systems or generate 4.37% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 94.74% |
| Values | Daily Returns |
IAR Systems Group vs. Clinical Laserthermia Systems
Performance |
| Timeline |
| IAR Systems Group |
| Clinical Laserthermia |
IAR Systems and Clinical Laserthermia Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with IAR Systems and Clinical Laserthermia
The main advantage of trading using opposite IAR Systems and Clinical Laserthermia positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if IAR Systems position performs unexpectedly, Clinical Laserthermia 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 Clinical Laserthermia will offset losses from the drop in Clinical Laserthermia's long position.| IAR Systems vs. CellaVision AB | IAR Systems vs. HMS Networks AB | IAR Systems vs. Enea AB | IAR Systems vs. Know IT AB |
| Clinical Laserthermia vs. Cantargia AB | Clinical Laserthermia vs. Episurf Medical AB | Clinical Laserthermia vs. Karolinska Development AB | Clinical Laserthermia vs. Acarix 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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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