Correlation Between Mantex AB and Sedana Medical
Can any of the company-specific risk be diversified away by investing in both Mantex AB and Sedana 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 Mantex AB and Sedana Medical into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Mantex AB and Sedana Medical AB, you can compare the effects of market volatilities on Mantex AB and Sedana 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 Mantex AB with a short position of Sedana Medical. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mantex AB and Sedana Medical.
Diversification Opportunities for Mantex AB and Sedana Medical
0.6 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Mantex and Sedana is 0.6. Overlapping area represents the amount of risk that can be diversified away by holding Mantex AB and Sedana Medical AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sedana Medical AB and Mantex AB 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 Mantex AB are associated (or correlated) with Sedana Medical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sedana Medical AB has no effect on the direction of Mantex AB i.e., Mantex AB and Sedana Medical go up and down completely randomly.
Pair Corralation between Mantex AB and Sedana Medical
Assuming the 90 days trading horizon Mantex AB is expected to under-perform the Sedana Medical. In addition to that, Mantex AB is 1.28 times more volatile than Sedana Medical AB. It trades about -0.21 of its total potential returns per unit of risk. Sedana Medical AB is currently generating about -0.1 per unit of volatility. If you would invest 2,580 in Sedana Medical AB on September 1, 2024 and sell it today you would lose (1,296) from holding Sedana Medical AB or give up 50.23% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 99.22% |
| Values | Daily Returns |
Mantex AB vs. Sedana Medical AB
Performance |
| Timeline |
| Mantex AB |
| Sedana Medical AB |
Mantex AB and Sedana Medical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Mantex AB and Sedana Medical
The main advantage of trading using opposite Mantex AB and Sedana Medical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mantex AB position performs unexpectedly, Sedana 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 Sedana Medical will offset losses from the drop in Sedana Medical's long position.| Mantex AB vs. Addtech AB | Mantex AB vs. Indutrade AB | Mantex AB vs. Lifco AB | Mantex AB vs. NIBE Industrier AB |
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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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.
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