Correlation Between Investor and Zenicor Medical
Can any of the company-specific risk be diversified away by investing in both Investor and Zenicor 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 Investor and Zenicor Medical into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Investor AB ser and Zenicor Medical Systems, you can compare the effects of market volatilities on Investor and Zenicor 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 Investor with a short position of Zenicor Medical. Check out your portfolio center. Please also check ongoing floating volatility patterns of Investor and Zenicor Medical.
Diversification Opportunities for Investor and Zenicor Medical
0.13 | Correlation Coefficient |
Average diversification
The 3 months correlation between Investor and Zenicor is 0.13. Overlapping area represents the amount of risk that can be diversified away by holding Investor AB ser and Zenicor Medical Systems in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Zenicor Medical Systems and Investor 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 Investor AB ser are associated (or correlated) with Zenicor Medical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Zenicor Medical Systems has no effect on the direction of Investor i.e., Investor and Zenicor Medical go up and down completely randomly.
Pair Corralation between Investor and Zenicor Medical
Assuming the 90 days trading horizon Investor AB ser is expected to generate 0.24 times more return on investment than Zenicor Medical. However, Investor AB ser is 4.15 times less risky than Zenicor Medical. It trades about -0.03 of its potential returns per unit of risk. Zenicor Medical Systems is currently generating about -0.11 per unit of risk. If you would invest 30,096 in Investor AB ser on September 2, 2024 and sell it today you would lose (171.00) from holding Investor AB ser or give up 0.57% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Investor AB ser vs. Zenicor Medical Systems
Performance |
| Timeline |
| Investor AB ser |
| Zenicor Medical Systems |
Investor and Zenicor Medical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Investor and Zenicor Medical
The main advantage of trading using opposite Investor and Zenicor Medical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Investor position performs unexpectedly, Zenicor 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 Zenicor Medical will offset losses from the drop in Zenicor Medical's long position.The idea behind Investor AB ser and Zenicor Medical Systems 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.| Zenicor Medical vs. AstraZeneca PLC | Zenicor Medical vs. Investor AB ser | Zenicor Medical vs. Investor AB ser | Zenicor Medical vs. Atlas Copco 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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.
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