Correlation Between Isofol Medical and CellaVision
Can any of the company-specific risk be diversified away by investing in both Isofol Medical and CellaVision 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 CellaVision 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 CellaVision AB, you can compare the effects of market volatilities on Isofol Medical and CellaVision 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 CellaVision. Check out your portfolio center. Please also check ongoing floating volatility patterns of Isofol Medical and CellaVision.
Diversification Opportunities for Isofol Medical and CellaVision
0.68 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Isofol and CellaVision is 0.68. Overlapping area represents the amount of risk that can be diversified away by holding Isofol Medical AB and CellaVision AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CellaVision 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 CellaVision. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CellaVision AB has no effect on the direction of Isofol Medical i.e., Isofol Medical and CellaVision go up and down completely randomly.
Pair Corralation between Isofol Medical and CellaVision
Assuming the 90 days trading horizon Isofol Medical AB is expected to generate 2.36 times more return on investment than CellaVision. However, Isofol Medical is 2.36 times more volatile than CellaVision AB. It trades about -0.01 of its potential returns per unit of risk. CellaVision AB is currently generating about -0.06 per unit of risk. If you would invest 264.00 in Isofol Medical AB on November 2, 2024 and sell it today you would lose (52.00) from holding Isofol Medical AB or give up 19.7% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Isofol Medical AB vs. CellaVision AB
Performance |
| Timeline |
| Isofol Medical AB |
| CellaVision AB |
Isofol Medical and CellaVision Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Isofol Medical and CellaVision
The main advantage of trading using opposite Isofol Medical and CellaVision positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Isofol Medical position performs unexpectedly, CellaVision 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 CellaVision will offset losses from the drop in CellaVision's long position.| Isofol Medical vs. XSpray Pharma AB | Isofol Medical vs. Oncopeptides AB | Isofol Medical vs. Hansa Biopharma AB | Isofol Medical vs. Alligator Bioscience AB |
| CellaVision vs. Vitrolife AB | CellaVision vs. Biotage AB | CellaVision vs. Sectra AB | CellaVision vs. BioGaia 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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.
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