Correlation Between NP3 Fastigheter and Clinical Laserthermia
Can any of the company-specific risk be diversified away by investing in both NP3 Fastigheter 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 NP3 Fastigheter and Clinical Laserthermia into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between NP3 Fastigheter AB and Clinical Laserthermia Systems, you can compare the effects of market volatilities on NP3 Fastigheter 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 NP3 Fastigheter with a short position of Clinical Laserthermia. Check out your portfolio center. Please also check ongoing floating volatility patterns of NP3 Fastigheter and Clinical Laserthermia.
Diversification Opportunities for NP3 Fastigheter and Clinical Laserthermia
0.38 | Correlation Coefficient |
Weak diversification
The 3 months correlation between NP3 and Clinical is 0.38. Overlapping area represents the amount of risk that can be diversified away by holding NP3 Fastigheter 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 NP3 Fastigheter 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 NP3 Fastigheter 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 NP3 Fastigheter i.e., NP3 Fastigheter and Clinical Laserthermia go up and down completely randomly.
Pair Corralation between NP3 Fastigheter and Clinical Laserthermia
Assuming the 90 days trading horizon NP3 Fastigheter AB is expected to generate 0.32 times more return on investment than Clinical Laserthermia. However, NP3 Fastigheter AB is 3.15 times less risky than Clinical Laserthermia. It trades about 0.03 of its potential returns per unit of risk. Clinical Laserthermia Systems is currently generating about -0.21 per unit of risk. If you would invest 25,500 in NP3 Fastigheter AB on September 2, 2024 and sell it today you would earn a total of 250.00 from holding NP3 Fastigheter AB or generate 0.98% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
NP3 Fastigheter AB vs. Clinical Laserthermia Systems
Performance |
| Timeline |
| NP3 Fastigheter AB |
| Clinical Laserthermia |
NP3 Fastigheter and Clinical Laserthermia Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with NP3 Fastigheter and Clinical Laserthermia
The main advantage of trading using opposite NP3 Fastigheter and Clinical Laserthermia positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NP3 Fastigheter 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.| NP3 Fastigheter vs. Fastighets AB Balder | NP3 Fastigheter vs. Wallenstam AB | NP3 Fastigheter vs. Hufvudstaden AB |
| Clinical Laserthermia vs. Xvivo Perfusion AB | Clinical Laserthermia vs. BICO Group AB | Clinical Laserthermia vs. Stille AB | Clinical Laserthermia vs. SpectraCure 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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.
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