Correlation Between OssDsign and Episurf Medical

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

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

Diversification Opportunities for OssDsign and Episurf Medical

-0.09

Correlation Coefficient

OssDsign  Episurf Medical

Good diversification

The 3 months correlation between OssDsign and Episurf is -0.09. Overlapping area represents the amount of risk that can be diversified away by holding OssDsign AB and Episurf Medical AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Episurf Medical AB and OssDsign 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 OssDsign AB are associated (or correlated) with Episurf Medical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Episurf Medical AB has no effect on the direction of OssDsign i.e., OssDsign and Episurf Medical go up and down completely randomly.

Pair Corralation between OssDsign and Episurf Medical

Assuming the 90 days trading horizon OssDsign AB is expected to generate 0.56 times more return on investment than Episurf Medical. However, OssDsign AB is 1.8 times less risky than Episurf Medical. It trades about 0.25 of its potential returns per unit of risk. Episurf Medical AB is currently generating about 0.05 per unit of risk. If you would invest  646.00  in OssDsign AB on October 5, 2024 and sell it today you would earn a total of  388.00  from holding OssDsign AB or generate 60.06% return on investment over 90 days.

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

OssDsign AB  vs.  Episurf Medical AB

OssDsign AB

Risk-Adjusted Performance

19 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in OssDsign AB are ranked lower than 19 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, OssDsign unveiled solid returns over the last few months and may actually be approaching a breakup point.

Episurf Medical AB

Risk-Adjusted Performance

0 of 100

Insignificant

Over the last 90 days Episurf Medical AB has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat uncertain forward indicators, Episurf Medical sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with OssDsign and Episurf Medical

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

The idea behind OssDsign AB and Episurf 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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.