Correlation Between Swedish Orphan and Getinge AB
Can any of the company-specific risk be diversified away by investing in both Swedish Orphan and Getinge AB 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 Swedish Orphan and Getinge AB into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Swedish Orphan Biovitrum and Getinge AB ser, you can compare the effects of market volatilities on Swedish Orphan and Getinge AB 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 Swedish Orphan with a short position of Getinge AB. Check out your portfolio center. Please also check ongoing floating volatility patterns of Swedish Orphan and Getinge AB.
Diversification Opportunities for Swedish Orphan and Getinge AB
0.87 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Swedish and Getinge is 0.87. Overlapping area represents the amount of risk that can be diversified away by holding Swedish Orphan Biovitrum and Getinge AB ser in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Getinge AB ser and Swedish Orphan 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 Swedish Orphan Biovitrum are associated (or correlated) with Getinge AB. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Getinge AB ser has no effect on the direction of Swedish Orphan i.e., Swedish Orphan and Getinge AB go up and down completely randomly.
Pair Corralation between Swedish Orphan and Getinge AB
Assuming the 90 days trading horizon Swedish Orphan is expected to generate 1.33 times less return on investment than Getinge AB. In addition to that, Swedish Orphan is 1.6 times more volatile than Getinge AB ser. It trades about 0.33 of its total potential returns per unit of risk. Getinge AB ser is currently generating about 0.71 per unit of volatility. If you would invest 17,850 in Getinge AB ser on October 22, 2024 and sell it today you would earn a total of 1,660 from holding Getinge AB ser or generate 9.3% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Swedish Orphan Biovitrum vs. Getinge AB ser
Performance |
| Timeline |
| Swedish Orphan Biovitrum |
| Getinge AB ser |
Swedish Orphan and Getinge AB Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Swedish Orphan and Getinge AB
The main advantage of trading using opposite Swedish Orphan and Getinge AB positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Swedish Orphan position performs unexpectedly, Getinge AB 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 Getinge AB will offset losses from the drop in Getinge AB's long position.| Swedish Orphan vs. Getinge AB ser | Swedish Orphan vs. Elekta AB | Swedish Orphan vs. AB SKF | Swedish Orphan vs. Saab 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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
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