Correlation Between Senzime AB and Real Heart
Can any of the company-specific risk be diversified away by investing in both Senzime AB and Real Heart 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 Real Heart into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Senzime AB and Real Heart, you can compare the effects of market volatilities on Senzime AB and Real Heart 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 Real Heart. Check out your portfolio center. Please also check ongoing floating volatility patterns of Senzime AB and Real Heart.
Diversification Opportunities for Senzime AB and Real Heart
0.7 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Senzime and Real is 0.7. Overlapping area represents the amount of risk that can be diversified away by holding Senzime AB and Real Heart in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Real Heart 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 Real Heart. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Real Heart has no effect on the direction of Senzime AB i.e., Senzime AB and Real Heart go up and down completely randomly.
Pair Corralation between Senzime AB and Real Heart
Assuming the 90 days trading horizon Senzime AB is expected to generate 0.47 times more return on investment than Real Heart. However, Senzime AB is 2.11 times less risky than Real Heart. It trades about -0.02 of its potential returns per unit of risk. Real Heart is currently generating about -0.04 per unit of risk. If you would invest 670.00 in Senzime AB on August 29, 2024 and sell it today you would lose (92.00) from holding Senzime AB or give up 13.73% 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. Real Heart
Performance |
| Timeline |
| Senzime AB |
| Real Heart |
Senzime AB and Real Heart Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Senzime AB and Real Heart
The main advantage of trading using opposite Senzime AB and Real Heart positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Senzime AB position performs unexpectedly, Real Heart 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 Real Heart will offset losses from the drop in Real Heart'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 |
| Real Heart vs. KABE Group AB | Real Heart vs. IAR Systems Group | Real Heart vs. Mekonomen AB | Real Heart vs. eEducation Albert 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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.
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