Correlation Between Sedana Medical and EEducation Albert
Can any of the company-specific risk be diversified away by investing in both Sedana Medical and EEducation Albert 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 Sedana Medical and EEducation Albert into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Sedana Medical AB and eEducation Albert AB, you can compare the effects of market volatilities on Sedana Medical and EEducation Albert 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 Sedana Medical with a short position of EEducation Albert. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sedana Medical and EEducation Albert.
Diversification Opportunities for Sedana Medical and EEducation Albert
0.69 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Sedana and EEducation is 0.69. Overlapping area represents the amount of risk that can be diversified away by holding Sedana Medical AB and eEducation Albert AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on eEducation Albert and Sedana 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 Sedana Medical AB are associated (or correlated) with EEducation Albert. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of eEducation Albert has no effect on the direction of Sedana Medical i.e., Sedana Medical and EEducation Albert go up and down completely randomly.
Pair Corralation between Sedana Medical and EEducation Albert
Assuming the 90 days trading horizon Sedana Medical AB is expected to generate 1.64 times more return on investment than EEducation Albert. However, Sedana Medical is 1.64 times more volatile than eEducation Albert AB. It trades about -0.03 of its potential returns per unit of risk. eEducation Albert AB is currently generating about -0.08 per unit of risk. If you would invest 3,282 in Sedana Medical AB on September 3, 2024 and sell it today you would lose (1,998) from holding Sedana Medical AB or give up 60.88% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sedana Medical AB vs. eEducation Albert AB
Performance |
| Timeline |
| Sedana Medical AB |
| eEducation Albert |
Sedana Medical and EEducation Albert Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sedana Medical and EEducation Albert
The main advantage of trading using opposite Sedana Medical and EEducation Albert positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sedana Medical position performs unexpectedly, EEducation Albert 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 EEducation Albert will offset losses from the drop in EEducation Albert's long position.| Sedana Medical vs. Getinge AB ser | Sedana Medical vs. Elekta AB | Sedana Medical vs. AddLife AB | Sedana Medical vs. Biotage AB |
| EEducation Albert vs. Greater Than AB | EEducation Albert vs. Cint Group AB | EEducation Albert vs. Acconeer AB | EEducation Albert vs. IAR Systems Group |
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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.
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