Correlation Between JonDeTech Sensors and Mendus AB
Can any of the company-specific risk be diversified away by investing in both JonDeTech Sensors and Mendus 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 JonDeTech Sensors and Mendus AB into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between JonDeTech Sensors and Mendus AB, you can compare the effects of market volatilities on JonDeTech Sensors and Mendus 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 JonDeTech Sensors with a short position of Mendus AB. Check out your portfolio center. Please also check ongoing floating volatility patterns of JonDeTech Sensors and Mendus AB.
Diversification Opportunities for JonDeTech Sensors and Mendus AB
-0.69 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between JonDeTech and Mendus is -0.69. Overlapping area represents the amount of risk that can be diversified away by holding JonDeTech Sensors and Mendus AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mendus AB and JonDeTech Sensors 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 JonDeTech Sensors are associated (or correlated) with Mendus AB. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mendus AB has no effect on the direction of JonDeTech Sensors i.e., JonDeTech Sensors and Mendus AB go up and down completely randomly.
Pair Corralation between JonDeTech Sensors and Mendus AB
Assuming the 90 days trading horizon JonDeTech Sensors is expected to generate 1.68 times more return on investment than Mendus AB. However, JonDeTech Sensors is 1.68 times more volatile than Mendus AB. It trades about -0.01 of its potential returns per unit of risk. Mendus AB is currently generating about -0.03 per unit of risk. If you would invest 5,200 in JonDeTech Sensors on August 30, 2024 and sell it today you would lose (4,872) from holding JonDeTech Sensors or give up 93.69% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
JonDeTech Sensors vs. Mendus AB
Performance |
| Timeline |
| JonDeTech Sensors |
| Mendus AB |
JonDeTech Sensors and Mendus AB Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with JonDeTech Sensors and Mendus AB
The main advantage of trading using opposite JonDeTech Sensors and Mendus AB positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if JonDeTech Sensors position performs unexpectedly, Mendus 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 Mendus AB will offset losses from the drop in Mendus AB's long position.| JonDeTech Sensors vs. Hexatronic Group AB | JonDeTech Sensors vs. Instalco Intressenter AB | JonDeTech Sensors vs. NOTE AB | JonDeTech Sensors vs. Dometic Group 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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.
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