Correlation Between Oncopeptides and Synsam AB
Can any of the company-specific risk be diversified away by investing in both Oncopeptides and Synsam AB 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 Oncopeptides and Synsam AB into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Oncopeptides AB and Synsam AB, you can compare the effects of market volatilities on Oncopeptides and Synsam AB 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 Oncopeptides with a short position of Synsam AB. Check out your portfolio center. Please also check ongoing floating volatility patterns of Oncopeptides and Synsam AB.
Diversification Opportunities for Oncopeptides and Synsam AB
0.88 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Oncopeptides and Synsam is 0.88. Overlapping area represents the amount of risk that can be diversified away by holding Oncopeptides AB and Synsam AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Synsam AB and Oncopeptides 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 Oncopeptides AB are associated (or correlated) with Synsam AB. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Synsam AB has no effect on the direction of Oncopeptides i.e., Oncopeptides and Synsam AB go up and down completely randomly.
Pair Corralation between Oncopeptides and Synsam AB
Assuming the 90 days trading horizon Oncopeptides AB is expected to under-perform the Synsam AB. In addition to that, Oncopeptides is 2.8 times more volatile than Synsam AB. It trades about -0.07 of its total potential returns per unit of risk. Synsam AB is currently generating about 0.01 per unit of volatility. If you would invest 4,168 in Synsam AB on September 12, 2024 and sell it today you would earn a total of 82.00 from holding Synsam AB or generate 1.97% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Oncopeptides AB vs. Synsam AB
Performance |
| Timeline |
| Oncopeptides AB |
| Synsam AB |
Oncopeptides and Synsam AB Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Oncopeptides and Synsam AB
The main advantage of trading using opposite Oncopeptides and Synsam AB positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Oncopeptides position performs unexpectedly, Synsam AB 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 Synsam AB will offset losses from the drop in Synsam AB's long position.| Oncopeptides vs. Hansa Biopharma AB | Oncopeptides vs. BioArctic AB | Oncopeptides vs. Sinch AB | Oncopeptides vs. Cantargia 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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.
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