Correlation Between Isofol Medical and Ascelia Pharma

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

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

Diversification Opportunities for Isofol Medical and Ascelia Pharma

-0.91

Correlation Coefficient

Isofol Medical  Ascelia Pharma

Pay attention - limited upside

The 3 months correlation between Isofol and Ascelia is -0.91. Overlapping area represents the amount of risk that can be diversified away by holding Isofol Medical AB and Ascelia Pharma AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ascelia Pharma AB and Isofol 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 Isofol Medical AB are associated (or correlated) with Ascelia Pharma. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ascelia Pharma AB has no effect on the direction of Isofol Medical i.e., Isofol Medical and Ascelia Pharma go up and down completely randomly.

Pair Corralation between Isofol Medical and Ascelia Pharma

Assuming the 90 days trading horizon Isofol Medical AB is expected to under-perform the Ascelia Pharma. In addition to that, Isofol Medical is 1.02 times more volatile than Ascelia Pharma AB. It trades about -0.19 of its total potential returns per unit of risk. Ascelia Pharma AB is currently generating about 0.16 per unit of volatility. If you would invest  216.00  in Ascelia Pharma AB on October 26, 2024 and sell it today you would earn a total of  92.00  from holding Ascelia Pharma AB or generate 42.59% return on investment over 90 days.

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

Isofol Medical AB  vs.  Ascelia Pharma AB

Isofol Medical AB

Risk-Adjusted Performance

0 of 100

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 weak performance in the last few months, the Stock's basic 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.

Ascelia Pharma AB

Risk-Adjusted Performance

12 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Ascelia Pharma AB are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively unfluctuating technical and fundamental indicators, Ascelia Pharma unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Isofol Medical and Ascelia Pharma

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

The idea behind Isofol Medical AB and Ascelia Pharma 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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.