Correlation Between Saniona AB and Qlife Holding

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

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

Diversification Opportunities for Saniona AB and Qlife Holding

-0.31

Correlation Coefficient

Saniona AB  Qlife Holding

Very good diversification

The 3 months correlation between Saniona and Qlife is -0.31. Overlapping area represents the amount of risk that can be diversified away by holding Saniona AB and Qlife Holding AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Qlife Holding AB and Saniona AB 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 Saniona AB are associated (or correlated) with Qlife Holding. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Qlife Holding AB has no effect on the direction of Saniona AB i.e., Saniona AB and Qlife Holding go up and down completely randomly.

Pair Corralation between Saniona AB and Qlife Holding

Assuming the 90 days trading horizon Saniona AB is expected to generate 2.12 times more return on investment than Qlife Holding. However, Saniona AB is 2.12 times more volatile than Qlife Holding AB. It trades about 0.09 of its potential returns per unit of risk. Qlife Holding AB is currently generating about -0.03 per unit of risk. If you would invest  495.00  in Saniona AB on September 8, 2024 and sell it today you would earn a total of  217.00  from holding Saniona AB or generate 43.84% return on investment over 90 days.

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

Saniona AB  vs.  Qlife Holding AB

Saniona AB

Risk-Adjusted Performance

7 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Saniona AB are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Saniona AB sustained solid returns over the last few months and may actually be approaching a breakup point.

Qlife Holding AB

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Qlife Holding AB has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest uncertain performance, the Stock's basic 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 Saniona AB and Qlife Holding

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

The idea behind Saniona AB and Qlife Holding 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 Portfolio Anywhere module to track or share privately all of your investments from the convenience of any device.