Correlation Between Mendus AB and Bonesupport Holding
Can any of the company-specific risk be diversified away by investing in both Mendus AB and Bonesupport Holding 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 Mendus AB and Bonesupport Holding into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Mendus AB and Bonesupport Holding AB, you can compare the effects of market volatilities on Mendus AB and Bonesupport Holding 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 Mendus AB with a short position of Bonesupport Holding. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mendus AB and Bonesupport Holding.
Diversification Opportunities for Mendus AB and Bonesupport Holding
0.38 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Mendus and Bonesupport is 0.38. Overlapping area represents the amount of risk that can be diversified away by holding Mendus AB and Bonesupport Holding AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bonesupport Holding and Mendus AB 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 Mendus AB are associated (or correlated) with Bonesupport Holding. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bonesupport Holding has no effect on the direction of Mendus AB i.e., Mendus AB and Bonesupport Holding go up and down completely randomly.
Pair Corralation between Mendus AB and Bonesupport Holding
Assuming the 90 days trading horizon Mendus AB is expected to under-perform the Bonesupport Holding. In addition to that, Mendus AB is 2.32 times more volatile than Bonesupport Holding AB. It trades about -0.03 of its total potential returns per unit of risk. Bonesupport Holding AB is currently generating about 0.13 per unit of volatility. If you would invest 7,985 in Bonesupport Holding AB on September 14, 2024 and sell it today you would earn a total of 26,555 from holding Bonesupport Holding AB or generate 332.56% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Mendus AB vs. Bonesupport Holding AB
Performance |
| Timeline |
| Mendus AB |
| Bonesupport Holding |
Mendus AB and Bonesupport Holding Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Mendus AB and Bonesupport Holding
The main advantage of trading using opposite Mendus AB and Bonesupport Holding positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mendus AB position performs unexpectedly, Bonesupport Holding 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 Bonesupport Holding will offset losses from the drop in Bonesupport Holding's long position.The idea behind Mendus AB and Bonesupport Holding AB pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| Bonesupport Holding vs. Mendus AB | Bonesupport Holding vs. Cantargia AB | Bonesupport Holding vs. BioInvent International AB | Bonesupport Holding vs. Isofol Medical 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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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