Correlation Between Sedana Medical and SenzaGen

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

Diversification Opportunities for Sedana Medical and SenzaGen

0.53

Correlation Coefficient

Sedana Medical  SenzaGen

Very weak diversification

The 3 months correlation between Sedana and SenzaGen is 0.53. Overlapping area represents the amount of risk that can be diversified away by holding Sedana Medical AB and SenzaGen AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SenzaGen 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 SenzaGen. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SenzaGen AB has no effect on the direction of Sedana Medical i.e., Sedana Medical and SenzaGen go up and down completely randomly.

Pair Corralation between Sedana Medical and SenzaGen

Assuming the 90 days trading horizon Sedana Medical AB is expected to under-perform the SenzaGen. In addition to that, Sedana Medical is 2.07 times more volatile than SenzaGen AB. It trades about -0.13 of its total potential returns per unit of risk. SenzaGen AB is currently generating about -0.01 per unit of volatility. If you would invest  750.00  in SenzaGen AB on September 4, 2024 and sell it today you would lose (25.00) from holding SenzaGen AB or give up 3.33% of portfolio value over 90 days.

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

Sedana Medical AB  vs.  SenzaGen 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 uncertain performance in the last few months, the Stock's fundamental indicators remain somewhat strong which may send shares a bit higher in January 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

SenzaGen AB

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days SenzaGen AB has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, SenzaGen is not utilizing all of its potentials. The current stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with Sedana Medical and SenzaGen

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

The idea behind Sedana Medical AB and SenzaGen 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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.