Correlation Between Demant AS and CONMED
Can any of the company-specific risk be diversified away by investing in both Demant AS and CONMED 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 Demant AS and CONMED into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Demant AS ADR and CONMED, you can compare the effects of market volatilities on Demant AS and CONMED 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 Demant AS with a short position of CONMED. Check out your portfolio center. Please also check ongoing floating volatility patterns of Demant AS and CONMED.
Diversification Opportunities for Demant AS and CONMED
Modest diversification
The 3 months correlation between Demant and CONMED is 0.27. Overlapping area represents the amount of risk that can be diversified away by holding Demant AS ADR and CONMED in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CONMED and Demant AS 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 Demant AS ADR are associated (or correlated) with CONMED. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CONMED has no effect on the direction of Demant AS i.e., Demant AS and CONMED go up and down completely randomly.
Pair Corralation between Demant AS and CONMED
Assuming the 90 days horizon Demant AS ADR is expected to generate 0.78 times more return on investment than CONMED. However, Demant AS ADR is 1.28 times less risky than CONMED. It trades about 0.0 of its potential returns per unit of risk. CONMED is currently generating about -0.05 per unit of risk. If you would invest 1,968 in Demant AS ADR on August 31, 2024 and sell it today you would lose (82.00) from holding Demant AS ADR or give up 4.17% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 99.73% |
| Values | Daily Returns |
Demant AS ADR vs. CONMED
Performance |
| Timeline |
| Demant AS ADR |
| CONMED |
Demant AS and CONMED Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Demant AS and CONMED
The main advantage of trading using opposite Demant AS and CONMED positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Demant AS position performs unexpectedly, CONMED 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 CONMED will offset losses from the drop in CONMED's long position.| Demant AS vs. Sonova Holding AG | Demant AS vs. Medtronic PLC | Demant AS vs. CONMED | Demant AS vs. Glaukos Corp |
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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.
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