Correlation Between Implantica and Sinch AB

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

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

Diversification Opportunities for Implantica and Sinch AB

0.75

Correlation Coefficient

Implantica  Sinch AB

Poor diversification

The 3 months correlation between Implantica and Sinch is 0.75. Overlapping area represents the amount of risk that can be diversified away by holding Implantica AG and Sinch AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sinch AB and Implantica 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 Implantica AG are associated (or correlated) with Sinch AB. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sinch AB has no effect on the direction of Implantica i.e., Implantica and Sinch AB go up and down completely randomly.

Pair Corralation between Implantica and Sinch AB

Assuming the 90 days trading horizon Implantica AG is expected to generate 0.7 times more return on investment than Sinch AB. However, Implantica AG is 1.42 times less risky than Sinch AB. It trades about -0.02 of its potential returns per unit of risk. Sinch AB is currently generating about -0.12 per unit of risk. If you would invest  4,120  in Implantica AG on October 13, 2024 and sell it today you would lose (255.00) from holding Implantica AG or give up 6.19% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	98.33%
Values	Daily Returns

Implantica AG  vs.  Sinch AB

Implantica AG

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Implantica AG has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, Implantica is not utilizing all of its potentials. The current stock price uproar, may contribute to short-horizon losses for the private investors.

Sinch AB

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Sinch 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 Implantica and Sinch AB

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

The idea behind Implantica AG and Sinch 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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..