Correlation Between Karolinska Development and Episurf Medical
Can any of the company-specific risk be diversified away by investing in both Karolinska Development and Episurf 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 Karolinska Development and Episurf Medical into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Karolinska Development AB and Episurf Medical AB, you can compare the effects of market volatilities on Karolinska Development and Episurf 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 Karolinska Development with a short position of Episurf Medical. Check out your portfolio center. Please also check ongoing floating volatility patterns of Karolinska Development and Episurf Medical.
Diversification Opportunities for Karolinska Development and Episurf Medical
0.3 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Karolinska and Episurf is 0.3. Overlapping area represents the amount of risk that can be diversified away by holding Karolinska Development AB and Episurf Medical AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Episurf Medical AB and Karolinska Development 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 Karolinska Development AB are associated (or correlated) with Episurf Medical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Episurf Medical AB has no effect on the direction of Karolinska Development i.e., Karolinska Development and Episurf Medical go up and down completely randomly.
Pair Corralation between Karolinska Development and Episurf Medical
Assuming the 90 days trading horizon Karolinska Development AB is expected to under-perform the Episurf Medical. But the stock apears to be less risky and, when comparing its historical volatility, Karolinska Development AB is 1.55 times less risky than Episurf Medical. The stock trades about -0.07 of its potential returns per unit of risk. The Episurf Medical AB is currently generating about -0.01 of returns per unit of risk over similar time horizon. If you would invest 15.00 in Episurf Medical AB on August 28, 2024 and sell it today you would lose (1.00) from holding Episurf Medical AB or give up 6.67% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Karolinska Development AB vs. Episurf Medical AB
Performance |
| Timeline |
| Karolinska Development |
| Episurf Medical AB |
Karolinska Development and Episurf Medical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Karolinska Development and Episurf Medical
The main advantage of trading using opposite Karolinska Development and Episurf Medical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Karolinska Development position performs unexpectedly, Episurf 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 Episurf Medical will offset losses from the drop in Episurf Medical's long position.| Karolinska Development vs. Oncopeptides AB | Karolinska Development vs. Cantargia AB | Karolinska Development vs. BioInvent International AB | Karolinska Development vs. Moberg Pharma AB |
| Episurf Medical vs. BioInvent International AB | Episurf Medical vs. Cantargia AB | Episurf Medical vs. Bonesupport Holding AB | Episurf Medical vs. Bactiguard Holding 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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
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