Correlation Between Clinical Laserthermia and Paxman AB

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

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

Diversification Opportunities for Clinical Laserthermia and Paxman AB

-0.08

Correlation Coefficient

Clinical Laserthermia  Paxman AB

Good diversification

The 3 months correlation between Clinical and Paxman is -0.08. Overlapping area represents the amount of risk that can be diversified away by holding Clinical Laserthermia Systems and Paxman AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Paxman AB and Clinical Laserthermia 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 Clinical Laserthermia Systems are associated (or correlated) with Paxman AB. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Paxman AB has no effect on the direction of Clinical Laserthermia i.e., Clinical Laserthermia and Paxman AB go up and down completely randomly.

Pair Corralation between Clinical Laserthermia and Paxman AB

Assuming the 90 days trading horizon Clinical Laserthermia Systems is expected to generate 1.58 times more return on investment than Paxman AB. However, Clinical Laserthermia is 1.58 times more volatile than Paxman AB. It trades about -0.03 of its potential returns per unit of risk. Paxman AB is currently generating about -0.05 per unit of risk. If you would invest  424.00  in Clinical Laserthermia Systems on December 4, 2024 and sell it today you would lose (44.00) from holding Clinical Laserthermia Systems or give up 10.38% of portfolio value over 90 days.

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

Clinical Laserthermia Systems  vs.  Paxman AB

Clinical Laserthermia

Risk-Adjusted Performance

Very Weak

Over the last 90 days Clinical Laserthermia Systems 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.

Paxman AB

Risk-Adjusted Performance

Very Weak

Over the last 90 days Paxman AB 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 Clinical Laserthermia and Paxman AB

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

The idea behind Clinical Laserthermia Systems and Paxman 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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.