Correlation Between SpectraCure and Chordate Medical
Can any of the company-specific risk be diversified away by investing in both SpectraCure and Chordate Medical 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 SpectraCure and Chordate Medical into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SpectraCure AB and Chordate Medical Holding, you can compare the effects of market volatilities on SpectraCure and Chordate Medical 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 SpectraCure with a short position of Chordate Medical. Check out your portfolio center. Please also check ongoing floating volatility patterns of SpectraCure and Chordate Medical.
Diversification Opportunities for SpectraCure and Chordate Medical
0.15 | Correlation Coefficient |
Average diversification
The 3 months correlation between SpectraCure and Chordate is 0.15. Overlapping area represents the amount of risk that can be diversified away by holding SpectraCure AB and Chordate Medical Holding in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Chordate Medical Holding and SpectraCure 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 SpectraCure AB are associated (or correlated) with Chordate Medical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Chordate Medical Holding has no effect on the direction of SpectraCure i.e., SpectraCure and Chordate Medical go up and down completely randomly.
Pair Corralation between SpectraCure and Chordate Medical
Assuming the 90 days trading horizon SpectraCure AB is expected to generate 1.95 times more return on investment than Chordate Medical. However, SpectraCure is 1.95 times more volatile than Chordate Medical Holding. It trades about -0.03 of its potential returns per unit of risk. Chordate Medical Holding is currently generating about -0.46 per unit of risk. If you would invest 182.00 in SpectraCure AB on August 28, 2024 and sell it today you would lose (17.00) from holding SpectraCure AB or give up 9.34% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
SpectraCure AB vs. Chordate Medical Holding
Performance |
| Timeline |
| SpectraCure AB |
| Chordate Medical Holding |
SpectraCure and Chordate Medical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SpectraCure and Chordate Medical
The main advantage of trading using opposite SpectraCure and Chordate Medical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SpectraCure position performs unexpectedly, Chordate Medical 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 Chordate Medical will offset losses from the drop in Chordate Medical's long position.The idea behind SpectraCure AB and Chordate Medical Holding pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| Chordate Medical vs. Xvivo Perfusion AB | Chordate Medical vs. SpectraCure AB | Chordate Medical vs. Senzime 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 Portfolio Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
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