Correlation Between Redsense Medical and Getinge AB
Can any of the company-specific risk be diversified away by investing in both Redsense Medical and Getinge 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 Redsense Medical and Getinge AB into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Redsense Medical AB and Getinge AB ser, you can compare the effects of market volatilities on Redsense Medical and Getinge 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 Redsense Medical with a short position of Getinge AB. Check out your portfolio center. Please also check ongoing floating volatility patterns of Redsense Medical and Getinge AB.
Diversification Opportunities for Redsense Medical and Getinge AB
0.03 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Redsense and Getinge is 0.03. Overlapping area represents the amount of risk that can be diversified away by holding Redsense Medical AB and Getinge AB ser in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Getinge AB ser and Redsense Medical 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 Redsense Medical AB are associated (or correlated) with Getinge AB. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Getinge AB ser has no effect on the direction of Redsense Medical i.e., Redsense Medical and Getinge AB go up and down completely randomly.
Pair Corralation between Redsense Medical and Getinge AB
Assuming the 90 days trading horizon Redsense Medical AB is expected to generate 2.13 times more return on investment than Getinge AB. However, Redsense Medical is 2.13 times more volatile than Getinge AB ser. It trades about 0.01 of its potential returns per unit of risk. Getinge AB ser is currently generating about -0.02 per unit of risk. If you would invest 970.00 in Redsense Medical AB on September 4, 2024 and sell it today you would lose (262.00) from holding Redsense Medical AB or give up 27.01% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 98.39% |
| Values | Daily Returns |
Redsense Medical AB vs. Getinge AB ser
Performance |
| Timeline |
| Redsense Medical |
| Getinge AB ser |
Redsense Medical and Getinge AB Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Redsense Medical and Getinge AB
The main advantage of trading using opposite Redsense Medical and Getinge AB positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Redsense Medical position performs unexpectedly, Getinge 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 Getinge AB will offset losses from the drop in Getinge AB's long position.| Redsense Medical vs. G5 Entertainment publ | Redsense Medical vs. Lundin Mining | Redsense Medical vs. Vitec Software Group | Redsense Medical vs. Upsales Technology 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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.
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