Correlation Between Mendus AB and Isofol Medical
Can any of the company-specific risk be diversified away by investing in both Mendus AB and Isofol 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 Mendus AB and Isofol Medical into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Mendus AB and Isofol Medical AB, you can compare the effects of market volatilities on Mendus AB and Isofol 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 Mendus AB with a short position of Isofol Medical. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mendus AB and Isofol Medical.
Diversification Opportunities for Mendus AB and Isofol Medical
0.79 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Mendus and Isofol is 0.79. Overlapping area represents the amount of risk that can be diversified away by holding Mendus AB and Isofol Medical AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Isofol Medical AB 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 Isofol Medical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Isofol Medical AB has no effect on the direction of Mendus AB i.e., Mendus AB and Isofol Medical go up and down completely randomly.
Pair Corralation between Mendus AB and Isofol Medical
Assuming the 90 days trading horizon Mendus AB is expected to under-perform the Isofol Medical. But the stock apears to be less risky and, when comparing its historical volatility, Mendus AB is 2.2 times less risky than Isofol Medical. The stock trades about -0.25 of its potential returns per unit of risk. The Isofol Medical AB is currently generating about -0.08 of returns per unit of risk over similar time horizon. If you would invest 247.00 in Isofol Medical AB on November 3, 2024 and sell it today you would lose (29.00) from holding Isofol Medical AB or give up 11.74% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Mendus AB vs. Isofol Medical AB
Performance |
| Timeline |
| Mendus AB |
| Isofol Medical AB |
Mendus AB and Isofol Medical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Mendus AB and Isofol Medical
The main advantage of trading using opposite Mendus AB and Isofol Medical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mendus AB position performs unexpectedly, Isofol 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 Isofol Medical will offset losses from the drop in Isofol Medical's long position.| Mendus AB vs. Cantargia AB | Mendus AB vs. BioInvent International AB | Mendus AB vs. Alligator Bioscience AB | Mendus AB vs. Moberg Pharma AB |
| Isofol Medical vs. XSpray Pharma AB | Isofol Medical vs. Oncopeptides AB | Isofol Medical vs. Hansa Biopharma AB | Isofol Medical vs. Alligator Bioscience 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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.
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