Correlation Between Senzime AB and GomSpace Group
Can any of the company-specific risk be diversified away by investing in both Senzime AB and GomSpace Group 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 Senzime AB and GomSpace Group into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Senzime AB and GomSpace Group AB, you can compare the effects of market volatilities on Senzime AB and GomSpace Group 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 Senzime AB with a short position of GomSpace Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of Senzime AB and GomSpace Group.
Diversification Opportunities for Senzime AB and GomSpace Group
0.73 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Senzime and GomSpace is 0.73. Overlapping area represents the amount of risk that can be diversified away by holding Senzime AB and GomSpace Group AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GomSpace Group AB and Senzime AB 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 Senzime AB are associated (or correlated) with GomSpace Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of GomSpace Group AB has no effect on the direction of Senzime AB i.e., Senzime AB and GomSpace Group go up and down completely randomly.
Pair Corralation between Senzime AB and GomSpace Group
Assuming the 90 days trading horizon Senzime AB is expected to under-perform the GomSpace Group. But the stock apears to be less risky and, when comparing its historical volatility, Senzime AB is 1.39 times less risky than GomSpace Group. The stock trades about -0.01 of its potential returns per unit of risk. The GomSpace Group AB is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 468.00 in GomSpace Group AB on August 29, 2024 and sell it today you would lose (11.00) from holding GomSpace Group AB or give up 2.35% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Senzime AB vs. GomSpace Group AB
Performance |
| Timeline |
| Senzime AB |
| GomSpace Group AB |
Senzime AB and GomSpace Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Senzime AB and GomSpace Group
The main advantage of trading using opposite Senzime AB and GomSpace Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Senzime AB position performs unexpectedly, GomSpace Group 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 GomSpace Group will offset losses from the drop in GomSpace Group's long position.| Senzime AB vs. GomSpace Group AB | Senzime AB vs. Hansa Biopharma AB | Senzime AB vs. Zealand Pharma AS | Senzime AB vs. BioInvent International AB |
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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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.
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