Correlation Between Polygiene and Chordate Medical

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

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

Diversification Opportunities for Polygiene and Chordate Medical

0.72

Correlation Coefficient

Polygiene  Chordate Medical

Poor diversification

The 3 months correlation between Polygiene and Chordate is 0.72. Overlapping area represents the amount of risk that can be diversified away by holding Polygiene AB and Chordate Medical Holding in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Chordate Medical Holding and Polygiene 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 Polygiene AB are associated (or correlated) with Chordate Medical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Chordate Medical Holding has no effect on the direction of Polygiene i.e., Polygiene and Chordate Medical go up and down completely randomly.

Pair Corralation between Polygiene and Chordate Medical

Assuming the 90 days trading horizon Polygiene AB is expected to under-perform the Chordate Medical. But the stock apears to be less risky and, when comparing its historical volatility, Polygiene AB is 4.38 times less risky than Chordate Medical. The stock trades about -0.14 of its potential returns per unit of risk. The Chordate Medical Holding is currently generating about -0.01 of returns per unit of risk over similar time horizon. If you would invest  898.00  in Chordate Medical Holding on December 30, 2024 and sell it today you would lose (356.00) from holding Chordate Medical Holding or give up 39.64% of portfolio value over 90 days.

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

Polygiene AB  vs.  Chordate Medical Holding

Polygiene AB

Risk-Adjusted Performance

Very Weak

Over the last 90 days Polygiene AB has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of uncertain performance in the last few months, the Stock's basic indicators remain comparatively stable which may send shares a bit higher in April 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Chordate Medical Holding

Risk-Adjusted Performance

Very Weak

Over the last 90 days Chordate Medical Holding has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest weak performance, the Stock's technical indicators remain stable and the newest uproar on Wall Street may also be a sign of mid-term gains for the firm private investors.

Pair Trading with Polygiene and Chordate Medical

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

The idea behind Polygiene AB and Chordate Medical Holding 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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.