Correlation Between SinterCast and Vitrolife
Can any of the company-specific risk be diversified away by investing in both SinterCast and Vitrolife 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 SinterCast and Vitrolife into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SinterCast AB and Vitrolife AB, you can compare the effects of market volatilities on SinterCast and Vitrolife 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 SinterCast with a short position of Vitrolife. Check out your portfolio center. Please also check ongoing floating volatility patterns of SinterCast and Vitrolife.
Diversification Opportunities for SinterCast and Vitrolife
0.66 | Correlation Coefficient |
Poor diversification
The 3 months correlation between SinterCast and Vitrolife is 0.66. Overlapping area represents the amount of risk that can be diversified away by holding SinterCast AB and Vitrolife AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Vitrolife AB and SinterCast 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 SinterCast AB are associated (or correlated) with Vitrolife. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Vitrolife AB has no effect on the direction of SinterCast i.e., SinterCast and Vitrolife go up and down completely randomly.
Pair Corralation between SinterCast and Vitrolife
Assuming the 90 days trading horizon SinterCast AB is expected to generate 0.48 times more return on investment than Vitrolife. However, SinterCast AB is 2.07 times less risky than Vitrolife. It trades about -0.09 of its potential returns per unit of risk. Vitrolife AB is currently generating about -0.11 per unit of risk. If you would invest 10,700 in SinterCast AB on October 25, 2024 and sell it today you would lose (150.00) from holding SinterCast AB or give up 1.4% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Significant |
Accuracy | 100.0% |
Values | Daily Returns |
SinterCast AB vs. Vitrolife AB
Performance |
Timeline |
SinterCast AB |
Vitrolife AB |
SinterCast and Vitrolife Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with SinterCast and Vitrolife
The main advantage of trading using opposite SinterCast and Vitrolife positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SinterCast position performs unexpectedly, Vitrolife 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 Vitrolife will offset losses from the drop in Vitrolife's long position.SinterCast vs. Lifco AB | SinterCast vs. Addtech AB | SinterCast vs. NIBE Industrier AB | SinterCast vs. Investment AB Latour |
Vitrolife vs. Biotage AB | Vitrolife vs. Sectra AB | Vitrolife vs. BioGaia AB | Vitrolife vs. Mycronic publ 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 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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