Correlation Between Stenocare and H Lundbeck
Can any of the company-specific risk be diversified away by investing in both Stenocare and H Lundbeck 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 Stenocare and H Lundbeck into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Stenocare AS and H Lundbeck AS, you can compare the effects of market volatilities on Stenocare and H Lundbeck 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 Stenocare with a short position of H Lundbeck. Check out your portfolio center. Please also check ongoing floating volatility patterns of Stenocare and H Lundbeck.
Diversification Opportunities for Stenocare and H Lundbeck
0.68 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Stenocare and HLUN-A is 0.68. Overlapping area represents the amount of risk that can be diversified away by holding Stenocare AS and H Lundbeck AS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on H Lundbeck AS and Stenocare 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 Stenocare AS are associated (or correlated) with H Lundbeck. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of H Lundbeck AS has no effect on the direction of Stenocare i.e., Stenocare and H Lundbeck go up and down completely randomly.
Pair Corralation between Stenocare and H Lundbeck
Assuming the 90 days trading horizon Stenocare is expected to generate 1.25 times less return on investment than H Lundbeck. In addition to that, Stenocare is 4.55 times more volatile than H Lundbeck AS. It trades about 0.01 of its total potential returns per unit of risk. H Lundbeck AS is currently generating about 0.07 per unit of volatility. If you would invest 2,824 in H Lundbeck AS on September 4, 2024 and sell it today you would earn a total of 726.00 from holding H Lundbeck AS or generate 25.71% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Stenocare AS vs. H Lundbeck AS
Performance |
| Timeline |
| Stenocare AS |
| H Lundbeck AS |
Stenocare and H Lundbeck Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Stenocare and H Lundbeck
The main advantage of trading using opposite Stenocare and H Lundbeck positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Stenocare position performs unexpectedly, H Lundbeck 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 H Lundbeck will offset losses from the drop in H Lundbeck's long position.| Stenocare vs. Bavarian Nordic | Stenocare vs. Investeringsselskabet Luxor AS | Stenocare vs. cBrain AS | Stenocare vs. Fast Ejendom |
| H Lundbeck vs. GN Store Nord | H Lundbeck vs. FLSmidth Co | H Lundbeck vs. ALK Abell AS | H Lundbeck vs. Ambu AS |
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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.
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