Correlation Between Jensen and Onward Medical
Can any of the company-specific risk be diversified away by investing in both Jensen and Onward 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 Jensen and Onward Medical into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Jensen Group and Onward Medical NV, you can compare the effects of market volatilities on Jensen and Onward 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 Jensen with a short position of Onward Medical. Check out your portfolio center. Please also check ongoing floating volatility patterns of Jensen and Onward Medical.
Diversification Opportunities for Jensen and Onward Medical
-0.5 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Jensen and Onward is -0.5. Overlapping area represents the amount of risk that can be diversified away by holding Jensen Group and Onward Medical NV in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Onward Medical NV and Jensen 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 Jensen Group are associated (or correlated) with Onward Medical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Onward Medical NV has no effect on the direction of Jensen i.e., Jensen and Onward Medical go up and down completely randomly.
Pair Corralation between Jensen and Onward Medical
Assuming the 90 days trading horizon Jensen is expected to generate 1.03 times less return on investment than Onward Medical. But when comparing it to its historical volatility, Jensen Group is 3.67 times less risky than Onward Medical. It trades about 0.07 of its potential returns per unit of risk. Onward Medical NV is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest 518.00 in Onward Medical NV on September 12, 2024 and sell it today you would lose (49.00) from holding Onward Medical NV or give up 9.46% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 99.16% |
| Values | Daily Returns |
Jensen Group vs. Onward Medical NV
Performance |
| Timeline |
| Jensen Group |
| Onward Medical NV |
Jensen and Onward Medical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Jensen and Onward Medical
The main advantage of trading using opposite Jensen and Onward Medical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Jensen position performs unexpectedly, Onward 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 Onward Medical will offset losses from the drop in Onward Medical's long position.The idea behind Jensen Group and Onward Medical NV 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.| Onward Medical vs. Biocartis Group NV | Onward Medical vs. Oxurion NV | Onward Medical vs. Exmar NV | Onward Medical vs. Iep Invest |
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 Portfolio Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
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