Correlation Between Tenon Medical and Demant AS
Can any of the company-specific risk be diversified away by investing in both Tenon Medical and Demant AS 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 Tenon Medical and Demant AS into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Tenon Medical and Demant AS ADR, you can compare the effects of market volatilities on Tenon Medical and Demant AS 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 Tenon Medical with a short position of Demant AS. Check out your portfolio center. Please also check ongoing floating volatility patterns of Tenon Medical and Demant AS.
Diversification Opportunities for Tenon Medical and Demant AS
0.61 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Tenon and Demant is 0.61. Overlapping area represents the amount of risk that can be diversified away by holding Tenon Medical and Demant AS ADR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Demant AS ADR and Tenon Medical 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 Tenon Medical are associated (or correlated) with Demant AS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Demant AS ADR has no effect on the direction of Tenon Medical i.e., Tenon Medical and Demant AS go up and down completely randomly.
Pair Corralation between Tenon Medical and Demant AS
Given the investment horizon of 90 days Tenon Medical is expected to under-perform the Demant AS. In addition to that, Tenon Medical is 5.82 times more volatile than Demant AS ADR. It trades about -0.03 of its total potential returns per unit of risk. Demant AS ADR is currently generating about 0.04 per unit of volatility. If you would invest 1,363 in Demant AS ADR on August 30, 2024 and sell it today you would earn a total of 523.00 from holding Demant AS ADR or generate 38.37% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Tenon Medical vs. Demant AS ADR
Performance |
| Timeline |
| Tenon Medical |
| Demant AS ADR |
Tenon Medical and Demant AS Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Tenon Medical and Demant AS
The main advantage of trading using opposite Tenon Medical and Demant AS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Tenon Medical position performs unexpectedly, Demant AS 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 Demant AS will offset losses from the drop in Demant AS's long position.| Tenon Medical vs. Ainos Inc | Tenon Medical vs. STRATA Skin Sciences | Tenon Medical vs. Neuropace | Tenon Medical vs. Movano Inc |
| Demant AS vs. CochLear Ltd ADR | Demant AS vs. GN Store Nord | Demant AS vs. GN Store Nord | Demant AS vs. Siemens Healthineers AG |
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 Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.
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