Correlation Between Scandinavian Medical and Stenocare
Can any of the company-specific risk be diversified away by investing in both Scandinavian Medical and Stenocare 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 Scandinavian Medical and Stenocare into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Scandinavian Medical Solutions and Stenocare AS, you can compare the effects of market volatilities on Scandinavian Medical and Stenocare 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 Scandinavian Medical with a short position of Stenocare. Check out your portfolio center. Please also check ongoing floating volatility patterns of Scandinavian Medical and Stenocare.
Diversification Opportunities for Scandinavian Medical and Stenocare
0.67 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Scandinavian and Stenocare is 0.67. Overlapping area represents the amount of risk that can be diversified away by holding Scandinavian Medical Solutions and Stenocare AS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Stenocare AS and Scandinavian 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 Scandinavian Medical Solutions are associated (or correlated) with Stenocare. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Stenocare AS has no effect on the direction of Scandinavian Medical i.e., Scandinavian Medical and Stenocare go up and down completely randomly.
Pair Corralation between Scandinavian Medical and Stenocare
Assuming the 90 days trading horizon Scandinavian Medical Solutions is expected to under-perform the Stenocare. But the stock apears to be less risky and, when comparing its historical volatility, Scandinavian Medical Solutions is 4.41 times less risky than Stenocare. The stock trades about -0.02 of its potential returns per unit of risk. The Stenocare AS is currently generating about 0.19 of returns per unit of risk over similar time horizon. If you would invest 140.00 in Stenocare AS on September 3, 2024 and sell it today you would earn a total of 64.00 from holding Stenocare AS or generate 45.71% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Scandinavian Medical Solutions vs. Stenocare AS
Performance |
| Timeline |
| Scandinavian Medical |
| Stenocare AS |
Scandinavian Medical and Stenocare Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Scandinavian Medical and Stenocare
The main advantage of trading using opposite Scandinavian Medical and Stenocare positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Scandinavian Medical position performs unexpectedly, Stenocare 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 Stenocare will offset losses from the drop in Stenocare's long position.| Scandinavian Medical vs. Novo Nordisk AS | Scandinavian Medical vs. Nordea Bank Abp | Scandinavian Medical vs. DSV Panalpina AS | Scandinavian Medical vs. AP Mller |
| Stenocare vs. Bavarian Nordic | Stenocare vs. Investeringsselskabet Luxor AS | Stenocare vs. cBrain AS | Stenocare vs. Fast Ejendom |
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 Portfolio Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.
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