Correlation Between Medistim ASA and Byggma
Can any of the company-specific risk be diversified away by investing in both Medistim ASA and Byggma 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 Medistim ASA and Byggma into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Medistim ASA and Byggma, you can compare the effects of market volatilities on Medistim ASA and Byggma 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 Medistim ASA with a short position of Byggma. Check out your portfolio center. Please also check ongoing floating volatility patterns of Medistim ASA and Byggma.
Diversification Opportunities for Medistim ASA and Byggma
0.22 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Medistim and Byggma is 0.22. Overlapping area represents the amount of risk that can be diversified away by holding Medistim ASA and Byggma in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Byggma and Medistim ASA 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 Medistim ASA are associated (or correlated) with Byggma. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Byggma has no effect on the direction of Medistim ASA i.e., Medistim ASA and Byggma go up and down completely randomly.
Pair Corralation between Medistim ASA and Byggma
Assuming the 90 days trading horizon Medistim ASA is expected to generate 0.45 times more return on investment than Byggma. However, Medistim ASA is 2.23 times less risky than Byggma. It trades about 0.14 of its potential returns per unit of risk. Byggma is currently generating about 0.03 per unit of risk. If you would invest 15,250 in Medistim ASA on November 3, 2024 and sell it today you would earn a total of 750.00 from holding Medistim ASA or generate 4.92% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 95.65% |
| Values | Daily Returns |
Medistim ASA vs. Byggma
Performance |
| Timeline |
| Medistim ASA |
| Byggma |
Medistim ASA and Byggma Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Medistim ASA and Byggma
The main advantage of trading using opposite Medistim ASA and Byggma positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Medistim ASA position performs unexpectedly, Byggma 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 Byggma will offset losses from the drop in Byggma's long position.| Medistim ASA vs. Kitron ASA | Medistim ASA vs. Photocure | Medistim ASA vs. AF Gruppen ASA | Medistim ASA vs. Borregaard ASA |
| Byggma vs. AF Gruppen ASA | Byggma vs. American Shipping | Byggma vs. Arendals Fossekompani ASA | Byggma vs. Kid ASA |
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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
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