Correlation Between Crescent and Sequana Medical
Can any of the company-specific risk be diversified away by investing in both Crescent and Sequana Medical 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 Crescent and Sequana Medical into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Crescent NV and Sequana Medical NV, you can compare the effects of market volatilities on Crescent and Sequana Medical 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 Crescent with a short position of Sequana Medical. Check out your portfolio center. Please also check ongoing floating volatility patterns of Crescent and Sequana Medical.
Diversification Opportunities for Crescent and Sequana Medical
-0.47 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Crescent and Sequana is -0.47. Overlapping area represents the amount of risk that can be diversified away by holding Crescent NV and Sequana Medical NV in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sequana Medical NV and Crescent 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 Crescent NV are associated (or correlated) with Sequana Medical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sequana Medical NV has no effect on the direction of Crescent i.e., Crescent and Sequana Medical go up and down completely randomly.
Pair Corralation between Crescent and Sequana Medical
Assuming the 90 days trading horizon Crescent NV is expected to generate 0.24 times more return on investment than Sequana Medical. However, Crescent NV is 4.14 times less risky than Sequana Medical. It trades about -0.11 of its potential returns per unit of risk. Sequana Medical NV is currently generating about -0.07 per unit of risk. If you would invest 1.02 in Crescent NV on November 1, 2024 and sell it today you would lose (0.06) from holding Crescent NV or give up 5.88% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Crescent NV vs. Sequana Medical NV
Performance |
| Timeline |
| Crescent NV |
| Sequana Medical NV |
Crescent and Sequana Medical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Crescent and Sequana Medical
The main advantage of trading using opposite Crescent and Sequana Medical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Crescent position performs unexpectedly, Sequana Medical 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 Sequana Medical will offset losses from the drop in Sequana Medical's long position.| Crescent vs. AGFA Gevaert NV | Crescent vs. Nyrstar NV | Crescent vs. Exmar NV | Crescent vs. EVS Broadcast Equipment |
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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.
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