Correlation Between Ratos AB and Medhelp Care
Can any of the company-specific risk be diversified away by investing in both Ratos AB and Medhelp Care 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 Ratos AB and Medhelp Care into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ratos AB and Medhelp Care AB, you can compare the effects of market volatilities on Ratos AB and Medhelp Care 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 Ratos AB with a short position of Medhelp Care. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ratos AB and Medhelp Care.
Diversification Opportunities for Ratos AB and Medhelp Care
-0.57 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Ratos and Medhelp is -0.57. Overlapping area represents the amount of risk that can be diversified away by holding Ratos AB and Medhelp Care AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Medhelp Care AB and Ratos AB 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 Ratos AB are associated (or correlated) with Medhelp Care. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Medhelp Care AB has no effect on the direction of Ratos AB i.e., Ratos AB and Medhelp Care go up and down completely randomly.
Pair Corralation between Ratos AB and Medhelp Care
Assuming the 90 days trading horizon Ratos AB is expected to under-perform the Medhelp Care. But the stock apears to be less risky and, when comparing its historical volatility, Ratos AB is 1.18 times less risky than Medhelp Care. The stock trades about -0.07 of its potential returns per unit of risk. The Medhelp Care AB is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest 302.00 in Medhelp Care AB on September 1, 2024 and sell it today you would lose (4.00) from holding Medhelp Care AB or give up 1.32% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Ratos AB vs. Medhelp Care AB
Performance |
| Timeline |
| Ratos AB |
| Medhelp Care AB |
Ratos AB and Medhelp Care Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ratos AB and Medhelp Care
The main advantage of trading using opposite Ratos AB and Medhelp Care positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ratos AB position performs unexpectedly, Medhelp Care 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 Medhelp Care will offset losses from the drop in Medhelp Care's long position.The idea behind Ratos AB and Medhelp Care AB 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.| Medhelp Care vs. AVTECH Sweden AB | Medhelp Care vs. K2A Knaust Andersson | Medhelp Care vs. Dlaboratory Sweden AB | Medhelp Care vs. eEducation Albert 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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..
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