Correlation Between SCANDMEDICAL SOLDK and Alarm Holdings
Can any of the company-specific risk be diversified away by investing in both SCANDMEDICAL SOLDK and Alarm Holdings 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 SCANDMEDICAL SOLDK and Alarm Holdings into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SCANDMEDICAL SOLDK 040 and Alarm Holdings, you can compare the effects of market volatilities on SCANDMEDICAL SOLDK and Alarm Holdings 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 SCANDMEDICAL SOLDK with a short position of Alarm Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of SCANDMEDICAL SOLDK and Alarm Holdings.
Diversification Opportunities for SCANDMEDICAL SOLDK and Alarm Holdings
-0.1 | Correlation Coefficient |
Good diversification
The 3 months correlation between SCANDMEDICAL and Alarm is -0.1. Overlapping area represents the amount of risk that can be diversified away by holding SCANDMEDICAL SOLDK 040 and Alarm Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Alarm Holdings and SCANDMEDICAL SOLDK 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 SCANDMEDICAL SOLDK 040 are associated (or correlated) with Alarm Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Alarm Holdings has no effect on the direction of SCANDMEDICAL SOLDK i.e., SCANDMEDICAL SOLDK and Alarm Holdings go up and down completely randomly.
Pair Corralation between SCANDMEDICAL SOLDK and Alarm Holdings
Assuming the 90 days horizon SCANDMEDICAL SOLDK 040 is expected to under-perform the Alarm Holdings. In addition to that, SCANDMEDICAL SOLDK is 1.55 times more volatile than Alarm Holdings. It trades about -0.07 of its total potential returns per unit of risk. Alarm Holdings is currently generating about 0.11 per unit of volatility. If you would invest 5,900 in Alarm Holdings on September 12, 2024 and sell it today you would earn a total of 250.00 from holding Alarm Holdings or generate 4.24% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.65% |
| Values | Daily Returns |
SCANDMEDICAL SOLDK 040 vs. Alarm Holdings
Performance |
| Timeline |
| SCANDMEDICAL SOLDK 040 |
| Alarm Holdings |
SCANDMEDICAL SOLDK and Alarm Holdings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SCANDMEDICAL SOLDK and Alarm Holdings
The main advantage of trading using opposite SCANDMEDICAL SOLDK and Alarm Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SCANDMEDICAL SOLDK position performs unexpectedly, Alarm Holdings 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 Alarm Holdings will offset losses from the drop in Alarm Holdings' long position.| SCANDMEDICAL SOLDK vs. Align Technology | SCANDMEDICAL SOLDK vs. Superior Plus Corp | SCANDMEDICAL SOLDK vs. SIVERS SEMICONDUCTORS AB | SCANDMEDICAL SOLDK vs. Norsk Hydro ASA |
| Alarm Holdings vs. SCANDMEDICAL SOLDK 040 | Alarm Holdings vs. CompuGroup Medical SE | Alarm Holdings vs. National Bank Holdings | Alarm Holdings vs. MeVis Medical Solutions |
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 File Import module to quickly import all of your third-party portfolios from your local drive in csv format.
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