Correlation Between RaySearch Laboratories and C Rad
Can any of the company-specific risk be diversified away by investing in both RaySearch Laboratories and C Rad 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 RaySearch Laboratories and C Rad into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between RaySearch Laboratories AB and C Rad AB, you can compare the effects of market volatilities on RaySearch Laboratories and C Rad 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 RaySearch Laboratories with a short position of C Rad. Check out your portfolio center. Please also check ongoing floating volatility patterns of RaySearch Laboratories and C Rad.
Diversification Opportunities for RaySearch Laboratories and C Rad
-0.61 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between RaySearch and CRAD-B is -0.61. Overlapping area represents the amount of risk that can be diversified away by holding RaySearch Laboratories AB and C Rad AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on C Rad AB and RaySearch Laboratories 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 RaySearch Laboratories AB are associated (or correlated) with C Rad. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of C Rad AB has no effect on the direction of RaySearch Laboratories i.e., RaySearch Laboratories and C Rad go up and down completely randomly.
Pair Corralation between RaySearch Laboratories and C Rad
Assuming the 90 days trading horizon RaySearch Laboratories AB is expected to generate 1.11 times more return on investment than C Rad. However, RaySearch Laboratories is 1.11 times more volatile than C Rad AB. It trades about 0.11 of its potential returns per unit of risk. C Rad AB is currently generating about -0.01 per unit of risk. If you would invest 5,857 in RaySearch Laboratories AB on August 25, 2024 and sell it today you would earn a total of 14,143 from holding RaySearch Laboratories AB or generate 241.47% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
RaySearch Laboratories AB vs. C Rad AB
Performance |
| Timeline |
| RaySearch Laboratories |
| C Rad AB |
RaySearch Laboratories and C Rad Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with RaySearch Laboratories and C Rad
The main advantage of trading using opposite RaySearch Laboratories and C Rad positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if RaySearch Laboratories position performs unexpectedly, C Rad 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 C Rad will offset losses from the drop in C Rad's long position.| RaySearch Laboratories vs. Elekta AB | RaySearch Laboratories vs. Vitrolife AB | RaySearch Laboratories vs. CellaVision AB | RaySearch Laboratories vs. Probi AB |
| C Rad vs. CellaVision AB | C Rad vs. Biotage AB | C Rad vs. Boule Diagnostics AB | C Rad vs. RaySearch Laboratories 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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.
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