Correlation Between SPECTRAL MEDICAL and Vestas Wind

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

By analyzing existing cross correlation between SPECTRAL MEDICAL and Vestas Wind Systems, you can compare the effects of market volatilities on SPECTRAL MEDICAL and Vestas Wind 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 SPECTRAL MEDICAL with a short position of Vestas Wind. Check out your portfolio center. Please also check ongoing floating volatility patterns of SPECTRAL MEDICAL and Vestas Wind.

Diversification Opportunities for SPECTRAL MEDICAL and Vestas Wind

0.0

Correlation Coefficient

SPECTRAL MEDICAL  Vestas Wind

Pay attention - limited upside

The 3 months correlation between SPECTRAL and Vestas is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding SPECTRAL MEDICAL and Vestas Wind Systems in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Vestas Wind Systems and SPECTRAL 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 SPECTRAL MEDICAL are associated (or correlated) with Vestas Wind. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Vestas Wind Systems has no effect on the direction of SPECTRAL MEDICAL i.e., SPECTRAL MEDICAL and Vestas Wind go up and down completely randomly.

Pair Corralation between SPECTRAL MEDICAL and Vestas Wind

If you would invest  22.00  in SPECTRAL MEDICAL on October 27, 2024 and sell it today you would earn a total of  11.00  from holding SPECTRAL MEDICAL or generate 50.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

SPECTRAL MEDICAL  vs.  Vestas Wind Systems

SPECTRAL MEDICAL

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days SPECTRAL MEDICAL has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest fragile performance, the Stock's basic indicators remain stable and the current disturbance on Wall Street may also be a sign of long-run gains for the company stockholders.

Vestas Wind Systems

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Vestas Wind Systems has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound fundamental drivers, Vestas Wind is not utilizing all of its potentials. The current stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with SPECTRAL MEDICAL and Vestas Wind

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

The idea behind SPECTRAL MEDICAL and Vestas Wind Systems 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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.