Correlation Between Sedana Medical and BIMobject

Can any of the company-specific risk be diversified away by investing in both Sedana Medical and BIMobject 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 BIMobject 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 BIMobject AB, you can compare the effects of market volatilities on Sedana Medical and BIMobject 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 BIMobject. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sedana Medical and BIMobject.

Diversification Opportunities for Sedana Medical and BIMobject

-0.48

Correlation Coefficient

Sedana Medical  BIMobject

Very good diversification

The 3 months correlation between Sedana and BIMobject is -0.48. Overlapping area represents the amount of risk that can be diversified away by holding Sedana Medical AB and BIMobject AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BIMobject 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 BIMobject. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BIMobject AB has no effect on the direction of Sedana Medical i.e., Sedana Medical and BIMobject go up and down completely randomly.

Pair Corralation between Sedana Medical and BIMobject

Assuming the 90 days trading horizon Sedana Medical is expected to generate 1.62 times less return on investment than BIMobject. In addition to that, Sedana Medical is 1.36 times more volatile than BIMobject AB. It trades about 0.02 of its total potential returns per unit of risk. BIMobject AB is currently generating about 0.04 per unit of volatility. If you would invest  300.00  in BIMobject AB on September 26, 2024 and sell it today you would earn a total of  150.00  from holding BIMobject AB or generate 50.0% return on investment over 90 days.

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

Sedana Medical AB  vs.  BIMobject 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.

BIMobject AB

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in BIMobject AB are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain primary indicators, BIMobject may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with Sedana Medical and BIMobject

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

The idea behind Sedana Medical AB and BIMobject 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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.