Correlation Between IAR Systems and Sedana Medical
Can any of the company-specific risk be diversified away by investing in both IAR Systems and Sedana 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 IAR Systems and Sedana Medical 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 Sedana Medical AB, you can compare the effects of market volatilities on IAR Systems and Sedana 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 IAR Systems with a short position of Sedana Medical. Check out your portfolio center. Please also check ongoing floating volatility patterns of IAR Systems and Sedana Medical.
Diversification Opportunities for IAR Systems and Sedana Medical
0.89 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between IAR and Sedana is 0.89. Overlapping area represents the amount of risk that can be diversified away by holding IAR Systems Group and Sedana Medical AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sedana Medical AB 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 Sedana Medical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sedana Medical AB has no effect on the direction of IAR Systems i.e., IAR Systems and Sedana Medical go up and down completely randomly.
Pair Corralation between IAR Systems and Sedana Medical
Assuming the 90 days trading horizon IAR Systems Group is expected to generate 0.57 times more return on investment than Sedana Medical. However, IAR Systems Group is 1.76 times less risky than Sedana Medical. It trades about 0.01 of its potential returns per unit of risk. Sedana Medical AB is currently generating about 0.0 per unit of risk. If you would invest 14,811 in IAR Systems Group on September 3, 2024 and sell it today you would lose (311.00) from holding IAR Systems Group or give up 2.1% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
IAR Systems Group vs. Sedana Medical AB
Performance |
| Timeline |
| IAR Systems Group |
| Sedana Medical AB |
IAR Systems and Sedana Medical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with IAR Systems and Sedana Medical
The main advantage of trading using opposite IAR Systems and Sedana Medical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if IAR Systems position performs unexpectedly, Sedana 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 Sedana Medical will offset losses from the drop in Sedana Medical'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 |
| Sedana Medical vs. Getinge AB ser | Sedana Medical vs. Elekta AB | Sedana Medical vs. AddLife AB | Sedana Medical vs. Biotage 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 Transaction History module to view history of all your transactions and understand their impact on performance.
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