Correlation Between Mendus AB and Isofol Medical

Specify exactly 2 symbols:
Can any of the company-specific risk be diversified away by investing in both Mendus AB and Isofol 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 Mendus AB and Isofol Medical into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Mendus AB and Isofol Medical AB, you can compare the effects of market volatilities on Mendus AB and Isofol 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 Mendus AB with a short position of Isofol Medical. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mendus AB and Isofol Medical.

Diversification Opportunities for Mendus AB and Isofol Medical

0.44
  Correlation Coefficient

Very weak diversification

The 3 months correlation between Mendus and Isofol is 0.44. Overlapping area represents the amount of risk that can be diversified away by holding Mendus AB and Isofol Medical AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Isofol Medical AB and Mendus AB 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 Mendus AB are associated (or correlated) with Isofol Medical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Isofol Medical AB has no effect on the direction of Mendus AB i.e., Mendus AB and Isofol Medical go up and down completely randomly.

Pair Corralation between Mendus AB and Isofol Medical

Assuming the 90 days trading horizon Mendus AB is expected to under-perform the Isofol Medical. But the stock apears to be less risky and, when comparing its historical volatility, Mendus AB is 1.2 times less risky than Isofol Medical. The stock trades about -0.12 of its potential returns per unit of risk. The Isofol Medical AB is currently generating about 0.13 of returns per unit of risk over similar time horizon. If you would invest  224.00  in Isofol Medical AB on October 12, 2024 and sell it today you would earn a total of  20.00  from holding Isofol Medical AB or generate 8.93% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthWeak
Accuracy100.0%
ValuesDaily Returns

Mendus AB  vs.  Isofol Medical AB

 Performance 
       Timeline  
Mendus AB 

Risk-Adjusted Performance

1 of 100

 
Weak
 
Strong
Weak
Compared to the overall equity markets, risk-adjusted returns on investments in Mendus AB are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable basic indicators, Mendus AB is not utilizing all of its potentials. The newest stock price uproar, may contribute to short-horizon losses for the private investors.
Isofol Medical AB 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days Isofol Medical AB has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, Isofol Medical is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Mendus AB and Isofol Medical Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Mendus AB and Isofol Medical

The main advantage of trading using opposite Mendus AB and Isofol Medical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mendus AB position performs unexpectedly, Isofol 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 Isofol Medical will offset losses from the drop in Isofol Medical's long position.
The idea behind Mendus AB and Isofol 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.
Check out your portfolio center.
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 Portfolio Dashboard module to portfolio dashboard that provides centralized access to all your investments.

Other Complementary Tools

Technical Analysis
Check basic technical indicators and analysis based on most latest market data
Latest Portfolios
Quick portfolio dashboard that showcases your latest portfolios
Portfolio Manager
State of the art Portfolio Manager to monitor and improve performance of your invested capital
Price Transformation
Use Price Transformation models to analyze the depth of different equity instruments across global markets
Risk-Return Analysis
View associations between returns expected from investment and the risk you assume