Correlation Between Oxurion NV and Sequana Medical
Can any of the company-specific risk be diversified away by investing in both Oxurion NV 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 Oxurion NV and Sequana Medical into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Oxurion NV and Sequana Medical NV, you can compare the effects of market volatilities on Oxurion NV 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 Oxurion NV with a short position of Sequana Medical. Check out your portfolio center. Please also check ongoing floating volatility patterns of Oxurion NV and Sequana Medical.
Diversification Opportunities for Oxurion NV and Sequana Medical
0.29 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Oxurion and Sequana is 0.29. Overlapping area represents the amount of risk that can be diversified away by holding Oxurion 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 Oxurion NV 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 Oxurion 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 Oxurion NV i.e., Oxurion NV and Sequana Medical go up and down completely randomly.
Pair Corralation between Oxurion NV and Sequana Medical
Assuming the 90 days trading horizon Oxurion NV is expected to under-perform the Sequana Medical. But the stock apears to be less risky and, when comparing its historical volatility, Oxurion NV is 2.08 times less risky than Sequana Medical. The stock trades about -0.14 of its potential returns per unit of risk. The Sequana Medical NV is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 95.00 in Sequana Medical NV on August 26, 2024 and sell it today you would lose (10.00) from holding Sequana Medical NV or give up 10.53% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Oxurion NV vs. Sequana Medical NV
Performance |
| Timeline |
| Oxurion NV |
| Sequana Medical NV |
Oxurion NV and Sequana Medical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Oxurion NV and Sequana Medical
The main advantage of trading using opposite Oxurion NV and Sequana Medical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Oxurion NV 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.The idea behind Oxurion NV and Sequana Medical NV pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
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