Correlation Between Integer Holdings and Demant A/S

Can any of the company-specific risk be diversified away by investing in both Integer Holdings and Demant A/S 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 Integer Holdings and Demant A/S into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Integer Holdings Corp and Demant AS ADR, you can compare the effects of market volatilities on Integer Holdings and Demant A/S 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 Integer Holdings with a short position of Demant A/S. Check out your portfolio center. Please also check ongoing floating volatility patterns of Integer Holdings and Demant A/S.

Diversification Opportunities for Integer Holdings and Demant A/S

0.46

Correlation Coefficient

Integer Holdings  Demant A/S

Very weak diversification

The 3 months correlation between Integer and Demant is 0.46. Overlapping area represents the amount of risk that can be diversified away by holding Integer Holdings Corp and Demant AS ADR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Demant AS ADR and Integer Holdings 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 Integer Holdings Corp are associated (or correlated) with Demant A/S. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Demant AS ADR has no effect on the direction of Integer Holdings i.e., Integer Holdings and Demant A/S go up and down completely randomly.

Pair Corralation between Integer Holdings and Demant A/S

Given the investment horizon of 90 days Integer Holdings Corp is expected to under-perform the Demant A/S. But the stock apears to be less risky and, when comparing its historical volatility, Integer Holdings Corp is 1.14 times less risky than Demant A/S. The stock trades about -0.12 of its potential returns per unit of risk. The Demant AS ADR is currently generating about -0.03 of returns per unit of risk over similar time horizon. If you would invest  1,886  in Demant AS ADR on November 29, 2024 and sell it today you would lose (71.00) from holding Demant AS ADR or give up 3.76% of portfolio value over 90 days.

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

Integer Holdings Corp  vs.  Demant AS ADR

Integer Holdings Corp

Risk-Adjusted Performance

Very Weak

Over the last 90 days Integer Holdings Corp has generated negative risk-adjusted returns adding no value to investors with long positions. Even with latest unsteady performance, the Stock's technical and fundamental indicators remain invariable and the latest agitation on Wall Street may also be a sign of long-running gains for the enterprise retail investors.

Demant AS ADR

Risk-Adjusted Performance

Very Weak

Over the last 90 days Demant AS ADR has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly strong basic indicators, Demant A/S is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Integer Holdings and Demant A/S

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

The idea behind Integer Holdings Corp and Demant AS ADR 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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.