Correlation Between Redsense Medical and Media
Can any of the company-specific risk be diversified away by investing in both Redsense Medical and Media 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 Media 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 Media and Games, you can compare the effects of market volatilities on Redsense Medical and Media 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 Media. Check out your portfolio center. Please also check ongoing floating volatility patterns of Redsense Medical and Media.
Diversification Opportunities for Redsense Medical and Media
-0.16 | Correlation Coefficient |
Good diversification
The 3 months correlation between Redsense and Media is -0.16. Overlapping area represents the amount of risk that can be diversified away by holding Redsense Medical AB and Media and Games in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Media and Games 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 Media. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Media and Games has no effect on the direction of Redsense Medical i.e., Redsense Medical and Media go up and down completely randomly.
Pair Corralation between Redsense Medical and Media
Assuming the 90 days trading horizon Redsense Medical is expected to generate 11.36 times less return on investment than Media. In addition to that, Redsense Medical is 1.2 times more volatile than Media and Games. It trades about 0.01 of its total potential returns per unit of risk. Media and Games is currently generating about 0.13 per unit of volatility. If you would invest 1,192 in Media and Games on September 14, 2024 and sell it today you would earn a total of 2,703 from holding Media and Games or generate 226.76% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Redsense Medical AB vs. Media and Games
Performance |
| Timeline |
| Redsense Medical |
| Media and Games |
Redsense Medical and Media Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Redsense Medical and Media
The main advantage of trading using opposite Redsense Medical and Media positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Redsense Medical position performs unexpectedly, Media 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 Media will offset losses from the drop in Media's long position.| Redsense Medical vs. Surgical Science Sweden | Redsense Medical vs. Bonesupport Holding AB | Redsense Medical vs. Swedencare publ AB | Redsense Medical vs. Oncopeptides AB |
| Media vs. Embracer Group AB | Media vs. Samhllsbyggnadsbolaget i Norden | Media vs. Sinch AB | Media vs. Zaptec AS |
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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.
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