Correlation Between Ascelia Pharma and Isofol Medical

Can any of the company-specific risk be diversified away by investing in both Ascelia Pharma and Isofol 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 Ascelia Pharma and Isofol Medical into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Ascelia Pharma AB and Isofol Medical AB, you can compare the effects of market volatilities on Ascelia Pharma and Isofol 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 Ascelia Pharma with a short position of Isofol Medical. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ascelia Pharma and Isofol Medical.

Diversification Opportunities for Ascelia Pharma and Isofol Medical

-0.35

Correlation Coefficient

Ascelia Pharma  Isofol Medical

Very good diversification

The 3 months correlation between Ascelia and Isofol is -0.35. Overlapping area represents the amount of risk that can be diversified away by holding Ascelia Pharma AB and Isofol Medical AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Isofol Medical AB and Ascelia Pharma 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 Ascelia Pharma AB are associated (or correlated) with Isofol Medical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Isofol Medical AB has no effect on the direction of Ascelia Pharma i.e., Ascelia Pharma and Isofol Medical go up and down completely randomly.

Pair Corralation between Ascelia Pharma and Isofol Medical

Assuming the 90 days trading horizon Ascelia Pharma AB is expected to generate 0.62 times more return on investment than Isofol Medical. However, Ascelia Pharma AB is 1.62 times less risky than Isofol Medical. It trades about 0.02 of its potential returns per unit of risk. Isofol Medical AB is currently generating about -0.05 per unit of risk. If you would invest  303.00  in Ascelia Pharma AB on December 24, 2024 and sell it today you would earn a total of  4.00  from holding Ascelia Pharma AB or generate 1.32% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Ascelia Pharma AB  vs.  Isofol Medical AB

Ascelia Pharma AB

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Ascelia Pharma AB are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable technical and fundamental indicators, Ascelia Pharma is not utilizing all of its potentials. The newest stock price uproar, may contribute to short-horizon losses for the private investors.

Isofol Medical AB

Risk-Adjusted Performance

Very Weak

Over the last 90 days Isofol Medical AB has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's basic indicators remain somewhat strong which may send shares a bit higher in April 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Pair Trading with Ascelia Pharma and Isofol Medical

The main advantage of trading using opposite Ascelia Pharma and Isofol Medical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ascelia Pharma position performs unexpectedly, Isofol 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 Isofol Medical will offset losses from the drop in Isofol Medical's long position.

The idea behind Ascelia Pharma AB and Isofol Medical AB pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..