Correlation Between Medistim ASA and Eqva ASA
Can any of the company-specific risk be diversified away by investing in both Medistim ASA and Eqva ASA 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 Eqva ASA into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Medistim ASA and Eqva ASA, you can compare the effects of market volatilities on Medistim ASA and Eqva ASA 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 Eqva ASA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Medistim ASA and Eqva ASA.
Diversification Opportunities for Medistim ASA and Eqva ASA
0.5 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Medistim and Eqva is 0.5. Overlapping area represents the amount of risk that can be diversified away by holding Medistim ASA and Eqva ASA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Eqva ASA 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 Eqva ASA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Eqva ASA has no effect on the direction of Medistim ASA i.e., Medistim ASA and Eqva ASA go up and down completely randomly.
Pair Corralation between Medistim ASA and Eqva ASA
Assuming the 90 days trading horizon Medistim ASA is expected to under-perform the Eqva ASA. But the stock apears to be less risky and, when comparing its historical volatility, Medistim ASA is 1.02 times less risky than Eqva ASA. The stock trades about -0.04 of its potential returns per unit of risk. The Eqva ASA is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 468.00 in Eqva ASA on September 2, 2024 and sell it today you would earn a total of 20.00 from holding Eqva ASA or generate 4.27% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Medistim ASA vs. Eqva ASA
Performance |
| Timeline |
| Medistim ASA |
| Eqva ASA |
Medistim ASA and Eqva ASA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Medistim ASA and Eqva ASA
The main advantage of trading using opposite Medistim ASA and Eqva ASA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Medistim ASA position performs unexpectedly, Eqva ASA 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 Eqva ASA will offset losses from the drop in Eqva ASA's long position.| Medistim ASA vs. Kitron ASA | Medistim ASA vs. Photocure | Medistim ASA vs. AF Gruppen ASA | Medistim ASA vs. Borregaard 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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.
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