Correlation Between Redsense Medical and Surgical Science
Can any of the company-specific risk be diversified away by investing in both Redsense Medical and Surgical Science 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 Surgical Science 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 Surgical Science Sweden, you can compare the effects of market volatilities on Redsense Medical and Surgical Science 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 Surgical Science. Check out your portfolio center. Please also check ongoing floating volatility patterns of Redsense Medical and Surgical Science.
Diversification Opportunities for Redsense Medical and Surgical Science
-0.01 | Correlation Coefficient |
Good diversification
The 3 months correlation between Redsense and Surgical is -0.01. Overlapping area represents the amount of risk that can be diversified away by holding Redsense Medical AB and Surgical Science Sweden in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Surgical Science Sweden 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 Surgical Science. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Surgical Science Sweden has no effect on the direction of Redsense Medical i.e., Redsense Medical and Surgical Science go up and down completely randomly.
Pair Corralation between Redsense Medical and Surgical Science
Assuming the 90 days trading horizon Redsense Medical AB is expected to under-perform the Surgical Science. But the stock apears to be less risky and, when comparing its historical volatility, Redsense Medical AB is 1.9 times less risky than Surgical Science. The stock trades about -0.18 of its potential returns per unit of risk. The Surgical Science Sweden is currently generating about 0.15 of returns per unit of risk over similar time horizon. If you would invest 15,910 in Surgical Science Sweden on October 22, 2024 and sell it today you would earn a total of 1,590 from holding Surgical Science Sweden or generate 9.99% 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. Surgical Science Sweden
Performance |
| Timeline |
| Redsense Medical |
| Surgical Science Sweden |
Redsense Medical and Surgical Science Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Redsense Medical and Surgical Science
The main advantage of trading using opposite Redsense Medical and Surgical Science positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Redsense Medical position performs unexpectedly, Surgical Science 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 Surgical Science will offset losses from the drop in Surgical Science's long position.| Redsense Medical vs. Invisio Communications AB | Redsense Medical vs. Systemair AB | Redsense Medical vs. Upsales Technology AB | Redsense Medical vs. JLT Mobile Computers |
| Surgical Science vs. BICO Group AB | Surgical Science vs. Hexatronic Group AB | Surgical Science vs. Swedencare publ AB | Surgical Science vs. MIPS 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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.
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