Correlation Between Isofol Medical and AroCell AB
Can any of the company-specific risk be diversified away by investing in both Isofol Medical and AroCell AB 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 Isofol Medical and AroCell AB into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Isofol Medical AB and AroCell AB, you can compare the effects of market volatilities on Isofol Medical and AroCell AB 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 Isofol Medical with a short position of AroCell AB. Check out your portfolio center. Please also check ongoing floating volatility patterns of Isofol Medical and AroCell AB.
Diversification Opportunities for Isofol Medical and AroCell AB
0.07 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Isofol and AroCell is 0.07. Overlapping area represents the amount of risk that can be diversified away by holding Isofol Medical AB and AroCell AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AroCell AB and Isofol Medical 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 Isofol Medical AB are associated (or correlated) with AroCell AB. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AroCell AB has no effect on the direction of Isofol Medical i.e., Isofol Medical and AroCell AB go up and down completely randomly.
Pair Corralation between Isofol Medical and AroCell AB
Assuming the 90 days trading horizon Isofol Medical AB is expected to generate 2.07 times more return on investment than AroCell AB. However, Isofol Medical is 2.07 times more volatile than AroCell AB. It trades about 0.06 of its potential returns per unit of risk. AroCell AB is currently generating about 0.0 per unit of risk. If you would invest 70.00 in Isofol Medical AB on September 13, 2024 and sell it today you would earn a total of 154.00 from holding Isofol Medical AB or generate 220.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Isofol Medical AB vs. AroCell AB
Performance |
| Timeline |
| Isofol Medical AB |
| AroCell AB |
Isofol Medical and AroCell AB Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Isofol Medical and AroCell AB
The main advantage of trading using opposite Isofol Medical and AroCell AB positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Isofol Medical position performs unexpectedly, AroCell AB 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 AroCell AB will offset losses from the drop in AroCell AB's long position.| Isofol Medical vs. Bavarian Nordic | Isofol Medical vs. BioPorto | Isofol Medical vs. Zaptec AS | Isofol Medical vs. cBrain AS |
| AroCell AB vs. Mendus AB | AroCell AB vs. Cantargia AB | AroCell AB vs. BioInvent International AB | AroCell AB 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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.
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