Correlation Between Redsense Medical and White Pearl
Can any of the company-specific risk be diversified away by investing in both Redsense Medical and White Pearl 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 White Pearl 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 White Pearl Technology, you can compare the effects of market volatilities on Redsense Medical and White Pearl 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 White Pearl. Check out your portfolio center. Please also check ongoing floating volatility patterns of Redsense Medical and White Pearl.
Diversification Opportunities for Redsense Medical and White Pearl
-0.16 | Correlation Coefficient |
Good diversification
The 3 months correlation between Redsense and White is -0.16. Overlapping area represents the amount of risk that can be diversified away by holding Redsense Medical AB and White Pearl Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on White Pearl Technology 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 White Pearl. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of White Pearl Technology has no effect on the direction of Redsense Medical i.e., Redsense Medical and White Pearl go up and down completely randomly.
Pair Corralation between Redsense Medical and White Pearl
Assuming the 90 days trading horizon Redsense Medical is expected to generate 10.61 times less return on investment than White Pearl. But when comparing it to its historical volatility, Redsense Medical AB is 1.26 times less risky than White Pearl. It trades about 0.04 of its potential returns per unit of risk. White Pearl Technology is currently generating about 0.37 of returns per unit of risk over similar time horizon. If you would invest 352.00 in White Pearl Technology on August 31, 2024 and sell it today you would earn a total of 242.00 from holding White Pearl Technology or generate 68.75% 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. White Pearl Technology
Performance |
| Timeline |
| Redsense Medical |
| White Pearl Technology |
Redsense Medical and White Pearl Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Redsense Medical and White Pearl
The main advantage of trading using opposite Redsense Medical and White Pearl positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Redsense Medical position performs unexpectedly, White Pearl 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 White Pearl will offset losses from the drop in White Pearl's long position.| Redsense Medical vs. Getinge AB ser | Redsense Medical vs. Elekta AB | Redsense Medical vs. AddLife AB | Redsense Medical vs. Biotage AB |
| White Pearl vs. AstraZeneca PLC | White Pearl vs. Investor AB ser | White Pearl vs. Investor AB ser | White Pearl vs. Atlas Copco 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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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