Correlation Between Momentum Group and Clinical Laserthermia
Can any of the company-specific risk be diversified away by investing in both Momentum Group and Clinical Laserthermia 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 Momentum Group and Clinical Laserthermia into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Momentum Group AB and Clinical Laserthermia Systems, you can compare the effects of market volatilities on Momentum Group and Clinical Laserthermia 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 Momentum Group with a short position of Clinical Laserthermia. Check out your portfolio center. Please also check ongoing floating volatility patterns of Momentum Group and Clinical Laserthermia.
Diversification Opportunities for Momentum Group and Clinical Laserthermia
0.19 | Correlation Coefficient |
Average diversification
The 3 months correlation between Momentum and Clinical is 0.19. Overlapping area represents the amount of risk that can be diversified away by holding Momentum Group AB and Clinical Laserthermia Systems in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Clinical Laserthermia and Momentum Group 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 Momentum Group AB are associated (or correlated) with Clinical Laserthermia. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Clinical Laserthermia has no effect on the direction of Momentum Group i.e., Momentum Group and Clinical Laserthermia go up and down completely randomly.
Pair Corralation between Momentum Group and Clinical Laserthermia
Assuming the 90 days trading horizon Momentum Group AB is expected to generate 0.24 times more return on investment than Clinical Laserthermia. However, Momentum Group AB is 4.18 times less risky than Clinical Laserthermia. It trades about 0.02 of its potential returns per unit of risk. Clinical Laserthermia Systems is currently generating about -0.14 per unit of risk. If you would invest 17,000 in Momentum Group AB on August 24, 2024 and sell it today you would earn a total of 60.00 from holding Momentum Group AB or generate 0.35% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Momentum Group AB vs. Clinical Laserthermia Systems
Performance |
| Timeline |
| Momentum Group AB |
| Clinical Laserthermia |
Momentum Group and Clinical Laserthermia Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Momentum Group and Clinical Laserthermia
The main advantage of trading using opposite Momentum Group and Clinical Laserthermia positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Momentum Group position performs unexpectedly, Clinical Laserthermia 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 Clinical Laserthermia will offset losses from the drop in Clinical Laserthermia's long position.| Momentum Group vs. Bergman Beving AB | Momentum Group vs. Lagercrantz Group AB | Momentum Group vs. AddLife AB | Momentum Group vs. Addtech AB |
| Clinical Laserthermia vs. Cantargia AB | Clinical Laserthermia vs. Episurf Medical AB | Clinical Laserthermia vs. Karolinska Development AB | Clinical Laserthermia vs. Acarix AS |
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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.
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