Correlation Between Sedana Medical and Integrum

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

Diversification Opportunities for Sedana Medical and Integrum

0.49

Correlation Coefficient

Sedana Medical  Integrum

Very weak diversification

The 3 months correlation between Sedana and Integrum is 0.49. Overlapping area represents the amount of risk that can be diversified away by holding Sedana Medical AB and Integrum AB Series in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Integrum AB Series 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 Integrum. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Integrum AB Series has no effect on the direction of Sedana Medical i.e., Sedana Medical and Integrum go up and down completely randomly.

Pair Corralation between Sedana Medical and Integrum

Assuming the 90 days trading horizon Sedana Medical AB is expected to generate 3.01 times more return on investment than Integrum. However, Sedana Medical is 3.01 times more volatile than Integrum AB Series. It trades about 0.3 of its potential returns per unit of risk. Integrum AB Series is currently generating about 0.12 per unit of risk. If you would invest  1,284  in Sedana Medical AB on October 8, 2024 and sell it today you would earn a total of  528.00  from holding Sedana Medical AB or generate 41.12% return on investment over 90 days.

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

Sedana Medical AB  vs.  Integrum AB Series

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 latest uncertain performance, the Stock's fundamental indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the company investors.

Integrum AB Series

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Integrum AB Series has generated negative risk-adjusted returns adding no value to investors with long positions. Despite uncertain performance in the last few months, the Stock's technical and fundamental indicators remain somewhat strong which may send shares a bit higher in February 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Pair Trading with Sedana Medical and Integrum

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

The idea behind Sedana Medical AB and Integrum AB Series 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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.