Correlation Between Integrum and Sedana Medical

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

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

Diversification Opportunities for Integrum and Sedana Medical

0.49

Correlation Coefficient

Integrum  Sedana Medical

Very weak diversification

The 3 months correlation between Integrum and Sedana is 0.49. Overlapping area represents the amount of risk that can be diversified away by holding Integrum AB Series and Sedana Medical AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sedana Medical AB and Integrum 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 Integrum AB Series are associated (or correlated) with Sedana Medical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sedana Medical AB has no effect on the direction of Integrum i.e., Integrum and Sedana Medical go up and down completely randomly.

Pair Corralation between Integrum and Sedana Medical

Assuming the 90 days trading horizon Integrum is expected to generate 7.6 times less return on investment than Sedana Medical. But when comparing it to its historical volatility, Integrum AB Series is 3.01 times less risky than Sedana Medical. It trades about 0.12 of its potential returns per unit of risk. Sedana Medical AB is currently generating about 0.3 of returns per unit of risk over similar time horizon. If you would invest  1,284  in Sedana Medical AB on October 8, 2024 and sell it today you would earn a total of  528.00  from holding Sedana Medical AB or generate 41.12% return on investment over 90 days.

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

Integrum AB Series  vs.  Sedana Medical AB

Integrum AB Series

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Integrum AB Series has generated negative risk-adjusted returns adding no value to investors with long positions. Despite uncertain performance in the last few months, the Stock's technical and fundamental indicators remain somewhat strong which may send shares a bit higher in February 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Sedana Medical AB

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Sedana Medical AB has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest uncertain performance, the Stock's fundamental indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the company investors.

Pair Trading with Integrum and Sedana Medical

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

The idea behind Integrum AB Series and Sedana 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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.