Correlation Between Chordate Medical and Episurf Medical

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

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

Diversification Opportunities for Chordate Medical and Episurf Medical

0.03

Correlation Coefficient

Chordate Medical  Episurf Medical

Significant diversification

The 3 months correlation between Chordate and Episurf is 0.03. Overlapping area represents the amount of risk that can be diversified away by holding Chordate Medical Holding and Episurf Medical AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Episurf Medical AB and Chordate Medical 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 Chordate Medical Holding are associated (or correlated) with Episurf Medical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Episurf Medical AB has no effect on the direction of Chordate Medical i.e., Chordate Medical and Episurf Medical go up and down completely randomly.

Pair Corralation between Chordate Medical and Episurf Medical

Assuming the 90 days trading horizon Chordate Medical Holding is expected to under-perform the Episurf Medical. But the stock apears to be less risky and, when comparing its historical volatility, Chordate Medical Holding is 1.53 times less risky than Episurf Medical. The stock trades about -0.58 of its potential returns per unit of risk. The Episurf Medical AB is currently generating about -0.02 of returns per unit of risk over similar time horizon. If you would invest  14.00  in Episurf Medical AB on October 6, 2024 and sell it today you would lose (1.00) from holding Episurf Medical AB or give up 7.14% of portfolio value over 90 days.

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

Chordate Medical Holding  vs.  Episurf Medical AB

Chordate Medical Holding

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Chordate Medical Holding has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of weak performance in the last few months, the Stock's technical indicators remain comparatively stable which may send shares a bit higher in February 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Episurf Medical AB

Risk-Adjusted Performance

2 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Episurf Medical AB are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak forward indicators, Episurf Medical may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Pair Trading with Chordate Medical and Episurf Medical

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

The idea behind Chordate Medical Holding and Episurf 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 Equity Valuation module to check real value of public entities based on technical and fundamental data.