Correlation Between Sedana Medical and Acconeer

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

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

Diversification Opportunities for Sedana Medical and Acconeer

0.75

Correlation Coefficient

Sedana Medical  Acconeer

Poor diversification

The 3 months correlation between Sedana and Acconeer is 0.75. Overlapping area represents the amount of risk that can be diversified away by holding Sedana Medical AB and Acconeer AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Acconeer AB and Sedana 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 Sedana Medical AB are associated (or correlated) with Acconeer. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Acconeer AB has no effect on the direction of Sedana Medical i.e., Sedana Medical and Acconeer go up and down completely randomly.

Pair Corralation between Sedana Medical and Acconeer

Assuming the 90 days trading horizon Sedana Medical AB is expected to generate 0.95 times more return on investment than Acconeer. However, Sedana Medical AB is 1.05 times less risky than Acconeer. It trades about 0.02 of its potential returns per unit of risk. Acconeer AB is currently generating about -0.07 per unit of risk. If you would invest  2,202  in Sedana Medical AB on September 26, 2024 and sell it today you would lose (212.00) from holding Sedana Medical AB or give up 9.63% of portfolio value over 90 days.

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

Sedana Medical AB  vs.  Acconeer AB

Sedana Medical AB

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Sedana Medical AB has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong fundamental indicators, Sedana Medical is not utilizing all of its potentials. The newest stock price disturbance, may contribute to short-term losses for the investors.

Acconeer AB

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Acconeer 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 January 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Pair Trading with Sedana Medical and Acconeer

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

The idea behind Sedana Medical AB and Acconeer 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 Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.