Correlation Between Sedana Medical and Dignitana
Can any of the company-specific risk be diversified away by investing in both Sedana Medical and Dignitana 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 Dignitana 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 Dignitana AB, you can compare the effects of market volatilities on Sedana Medical and Dignitana 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 Dignitana. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sedana Medical and Dignitana.
Diversification Opportunities for Sedana Medical and Dignitana
-0.51 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Sedana and Dignitana is -0.51. Overlapping area represents the amount of risk that can be diversified away by holding Sedana Medical AB and Dignitana AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dignitana AB 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 Dignitana. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dignitana AB has no effect on the direction of Sedana Medical i.e., Sedana Medical and Dignitana go up and down completely randomly.
Pair Corralation between Sedana Medical and Dignitana
Assuming the 90 days trading horizon Sedana Medical AB is expected to generate 0.84 times more return on investment than Dignitana. However, Sedana Medical AB is 1.19 times less risky than Dignitana. It trades about -0.15 of its potential returns per unit of risk. Dignitana AB is currently generating about -0.2 per unit of risk. If you would invest 1,450 in Sedana Medical AB on August 27, 2024 and sell it today you would lose (254.00) from holding Sedana Medical AB or give up 17.52% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sedana Medical AB vs. Dignitana AB
Performance |
| Timeline |
| Sedana Medical AB |
| Dignitana AB |
Sedana Medical and Dignitana Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sedana Medical and Dignitana
The main advantage of trading using opposite Sedana Medical and Dignitana positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sedana Medical position performs unexpectedly, Dignitana 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 Dignitana will offset losses from the drop in Dignitana's long position.| Sedana Medical vs. Addtech AB | Sedana Medical vs. Lifco AB | Sedana Medical vs. Indutrade AB | Sedana Medical vs. Lagercrantz Group 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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.
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