Correlation Between Surgical Science and Sedana Medical
Can any of the company-specific risk be diversified away by investing in both Surgical Science and Sedana 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 Surgical Science and Sedana Medical into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Surgical Science Sweden and Sedana Medical AB, you can compare the effects of market volatilities on Surgical Science and Sedana 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 Surgical Science with a short position of Sedana Medical. Check out your portfolio center. Please also check ongoing floating volatility patterns of Surgical Science and Sedana Medical.
Diversification Opportunities for Surgical Science and Sedana Medical
-0.54 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Surgical and Sedana is -0.54. Overlapping area represents the amount of risk that can be diversified away by holding Surgical Science Sweden and Sedana Medical AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sedana Medical AB and Surgical Science 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 Surgical Science Sweden are associated (or correlated) with Sedana Medical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sedana Medical AB has no effect on the direction of Surgical Science i.e., Surgical Science and Sedana Medical go up and down completely randomly.
Pair Corralation between Surgical Science and Sedana Medical
Assuming the 90 days trading horizon Surgical Science Sweden is expected to generate 0.75 times more return on investment than Sedana Medical. However, Surgical Science Sweden is 1.33 times less risky than Sedana Medical. It trades about 0.17 of its potential returns per unit of risk. Sedana Medical AB is currently generating about -0.15 per unit of risk. If you would invest 13,070 in Surgical Science Sweden on August 27, 2024 and sell it today you would earn a total of 1,780 from holding Surgical Science Sweden or generate 13.62% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Surgical Science Sweden vs. Sedana Medical AB
Performance |
| Timeline |
| Surgical Science Sweden |
| Sedana Medical AB |
Surgical Science and Sedana Medical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Surgical Science and Sedana Medical
The main advantage of trading using opposite Surgical Science and Sedana Medical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Surgical Science position performs unexpectedly, Sedana 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 Sedana Medical will offset losses from the drop in Sedana Medical's long position.| Surgical Science vs. AVTECH Sweden AB | Surgical Science vs. K2A Knaust Andersson | Surgical Science vs. Dlaboratory Sweden AB | Surgical Science vs. eEducation Albert AB |
| Sedana Medical vs. Addtech AB | Sedana Medical vs. Lifco AB | Sedana Medical vs. Indutrade AB | Sedana Medical vs. Lagercrantz Group 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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.
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