Correlation Between SANUWAVE Health and Spectrascience New
Can any of the company-specific risk be diversified away by investing in both SANUWAVE Health and Spectrascience New 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 SANUWAVE Health and Spectrascience New into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SANUWAVE Health and Spectrascience New, you can compare the effects of market volatilities on SANUWAVE Health and Spectrascience New 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 SANUWAVE Health with a short position of Spectrascience New. Check out your portfolio center. Please also check ongoing floating volatility patterns of SANUWAVE Health and Spectrascience New.
Diversification Opportunities for SANUWAVE Health and Spectrascience New
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between SANUWAVE and Spectrascience is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding SANUWAVE Health and Spectrascience New in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Spectrascience New and SANUWAVE Health 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 SANUWAVE Health are associated (or correlated) with Spectrascience New. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Spectrascience New has no effect on the direction of SANUWAVE Health i.e., SANUWAVE Health and Spectrascience New go up and down completely randomly.
Pair Corralation between SANUWAVE Health and Spectrascience New
Given the investment horizon of 90 days SANUWAVE Health is expected to generate 1.95 times more return on investment than Spectrascience New. However, SANUWAVE Health is 1.95 times more volatile than Spectrascience New. It trades about 0.12 of its potential returns per unit of risk. Spectrascience New is currently generating about 0.06 per unit of risk. If you would invest 1,613 in SANUWAVE Health on November 2, 2024 and sell it today you would earn a total of 1,177 from holding SANUWAVE Health or generate 72.97% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 95.95% |
| Values | Daily Returns |
SANUWAVE Health vs. Spectrascience New
Performance |
| Timeline |
| SANUWAVE Health |
| Spectrascience New |
SANUWAVE Health and Spectrascience New Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SANUWAVE Health and Spectrascience New
The main advantage of trading using opposite SANUWAVE Health and Spectrascience New positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SANUWAVE Health position performs unexpectedly, Spectrascience New 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 Spectrascience New will offset losses from the drop in Spectrascience New's long position.| SANUWAVE Health vs. Rafarma Pharmaceuticals | SANUWAVE Health vs. GulfSlope Energy | SANUWAVE Health vs. TSS, Common Stock |
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 Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
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