Correlation Between Episurf Medical and Doxa AB

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

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

Diversification Opportunities for Episurf Medical and Doxa AB

0.3

Correlation Coefficient

Episurf Medical  Doxa AB

Weak diversification

The 3 months correlation between Episurf and Doxa is 0.3. Overlapping area represents the amount of risk that can be diversified away by holding Episurf Medical AB and Doxa AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Doxa AB and Episurf 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 Episurf Medical AB are associated (or correlated) with Doxa AB. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Doxa AB has no effect on the direction of Episurf Medical i.e., Episurf Medical and Doxa AB go up and down completely randomly.

Pair Corralation between Episurf Medical and Doxa AB

Assuming the 90 days trading horizon Episurf Medical AB is expected to generate 1.03 times more return on investment than Doxa AB. However, Episurf Medical is 1.03 times more volatile than Doxa AB. It trades about 0.05 of its potential returns per unit of risk. Doxa AB is currently generating about -0.11 per unit of risk. If you would invest  13.00  in Episurf Medical AB on October 5, 2024 and sell it today you would earn a total of  1.00  from holding Episurf Medical AB or generate 7.69% return on investment over 90 days.

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

Episurf Medical AB  vs.  Doxa AB

Episurf Medical AB

Risk-Adjusted Performance

0 of 100

Insignificant

Over the last 90 days Episurf Medical AB has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat uncertain forward indicators, Episurf Medical sustained solid returns over the last few months and may actually be approaching a breakup point.

Doxa AB

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Doxa AB 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 basic 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.

Pair Trading with Episurf Medical and Doxa AB

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

The idea behind Episurf Medical AB and Doxa 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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.