Correlation Between ConforMIS and Demant AS

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

By analyzing existing cross correlation between ConforMIS and Demant AS ADR, you can compare the effects of market volatilities on ConforMIS 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 ConforMIS with a short position of Demant AS. Check out your portfolio center. Please also check ongoing floating volatility patterns of ConforMIS and Demant AS.

Diversification Opportunities for ConforMIS and Demant AS

-0.42

Correlation Coefficient

ConforMIS  Demant AS

Very good diversification

The 3 months correlation between ConforMIS and Demant is -0.42. Overlapping area represents the amount of risk that can be diversified away by holding ConforMIS 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 ConforMIS 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 ConforMIS 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 ConforMIS i.e., ConforMIS and Demant AS go up and down completely randomly.

Pair Corralation between ConforMIS and Demant AS

If you would invest  223.00  in ConforMIS on September 5, 2024 and sell it today you would earn a total of  0.00  from holding ConforMIS or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	1.59%
Values	Daily Returns

ConforMIS  vs.  Demant AS ADR

ConforMIS

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days ConforMIS has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable primary indicators, ConforMIS is not utilizing all of its potentials. The current stock price uproar, may contribute to short-horizon losses for the private investors.

Demant AS ADR

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Demant AS ADR has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest weak performance, the Stock's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the company investors.

Pair Trading with ConforMIS and Demant AS

The main advantage of trading using opposite ConforMIS and Demant AS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ConforMIS 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.

The idea behind ConforMIS and Demant AS ADR 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 Global Correlations module to find global opportunities by holding instruments from different markets.