Correlation Between Vitrolife and SinterCast
Can any of the company-specific risk be diversified away by investing in both Vitrolife and SinterCast 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 Vitrolife and SinterCast into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Vitrolife AB and SinterCast AB, you can compare the effects of market volatilities on Vitrolife and SinterCast 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 Vitrolife with a short position of SinterCast. Check out your portfolio center. Please also check ongoing floating volatility patterns of Vitrolife and SinterCast.
Diversification Opportunities for Vitrolife and SinterCast
0.56 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Vitrolife and SinterCast is 0.56. Overlapping area represents the amount of risk that can be diversified away by holding Vitrolife AB and SinterCast AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SinterCast AB and Vitrolife 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 Vitrolife AB are associated (or correlated) with SinterCast. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SinterCast AB has no effect on the direction of Vitrolife i.e., Vitrolife and SinterCast go up and down completely randomly.
Pair Corralation between Vitrolife and SinterCast
Assuming the 90 days trading horizon Vitrolife AB is expected to generate 2.65 times more return on investment than SinterCast. However, Vitrolife is 2.65 times more volatile than SinterCast AB. It trades about 0.07 of its potential returns per unit of risk. SinterCast AB is currently generating about -0.07 per unit of risk. If you would invest 21,740 in Vitrolife AB on November 4, 2024 and sell it today you would earn a total of 600.00 from holding Vitrolife AB or generate 2.76% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Vitrolife AB vs. SinterCast AB
Performance |
| Timeline |
| Vitrolife AB |
| SinterCast AB |
Vitrolife and SinterCast Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Vitrolife and SinterCast
The main advantage of trading using opposite Vitrolife and SinterCast positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Vitrolife position performs unexpectedly, SinterCast 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 SinterCast will offset losses from the drop in SinterCast's long position.| Vitrolife vs. Redsense Medical AB | Vitrolife vs. Leading Edge Materials | Vitrolife vs. SolTech Energy Sweden | Vitrolife vs. Viaplay Group AB |
| SinterCast vs. CTT Systems AB | SinterCast vs. Studsvik AB | SinterCast vs. Proact IT Group | SinterCast vs. Rottneros 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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.
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