Correlation Between Corline Biomedical and Investment

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

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

Diversification Opportunities for Corline Biomedical and Investment

0.13

Correlation Coefficient

Corline Biomedical  Investment

Average diversification

The 3 months correlation between Corline and Investment is 0.13. Overlapping area represents the amount of risk that can be diversified away by holding Corline Biomedical AB and Investment AB Oresund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Investment AB Oresund and Corline Biomedical 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 Corline Biomedical AB are associated (or correlated) with Investment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Investment AB Oresund has no effect on the direction of Corline Biomedical i.e., Corline Biomedical and Investment go up and down completely randomly.

Pair Corralation between Corline Biomedical and Investment

Assuming the 90 days trading horizon Corline Biomedical AB is expected to generate 1.89 times more return on investment than Investment. However, Corline Biomedical is 1.89 times more volatile than Investment AB Oresund. It trades about 0.63 of its potential returns per unit of risk. Investment AB Oresund is currently generating about -0.03 per unit of risk. If you would invest  738.00  in Corline Biomedical AB on October 6, 2024 and sell it today you would earn a total of  246.00  from holding Corline Biomedical AB or generate 33.33% return on investment over 90 days.

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

Corline Biomedical AB  vs.  Investment AB Oresund

Corline Biomedical

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Corline Biomedical AB are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, Corline Biomedical unveiled solid returns over the last few months and may actually be approaching a breakup point.

Investment AB Oresund

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Investment AB Oresund has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest uncertain performance, the Stock's basic indicators remain stable and the newest uproar on Wall Street may also be a sign of mid-term gains for the firm private investors.

Pair Trading with Corline Biomedical and Investment

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

The idea behind Corline Biomedical AB and Investment AB Oresund 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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.