Correlation Between Scandinavian Medical and Strategic Investments
Can any of the company-specific risk be diversified away by investing in both Scandinavian Medical and Strategic Investments 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 Scandinavian Medical and Strategic Investments into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Scandinavian Medical Solutions and Strategic Investments AS, you can compare the effects of market volatilities on Scandinavian Medical and Strategic Investments 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 Scandinavian Medical with a short position of Strategic Investments. Check out your portfolio center. Please also check ongoing floating volatility patterns of Scandinavian Medical and Strategic Investments.
Diversification Opportunities for Scandinavian Medical and Strategic Investments
0.2 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Scandinavian and Strategic is 0.2. Overlapping area represents the amount of risk that can be diversified away by holding Scandinavian Medical Solutions and Strategic Investments AS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Strategic Investments and Scandinavian 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 Scandinavian Medical Solutions are associated (or correlated) with Strategic Investments. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Strategic Investments has no effect on the direction of Scandinavian Medical i.e., Scandinavian Medical and Strategic Investments go up and down completely randomly.
Pair Corralation between Scandinavian Medical and Strategic Investments
Assuming the 90 days trading horizon Scandinavian Medical Solutions is expected to under-perform the Strategic Investments. In addition to that, Scandinavian Medical is 1.13 times more volatile than Strategic Investments AS. It trades about -0.17 of its total potential returns per unit of risk. Strategic Investments AS is currently generating about 0.22 per unit of volatility. If you would invest 93.00 in Strategic Investments AS on October 11, 2024 and sell it today you would earn a total of 9.00 from holding Strategic Investments AS or generate 9.68% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Very Weak |
Accuracy | 94.44% |
Values | Daily Returns |
Scandinavian Medical Solutions vs. Strategic Investments AS
Performance |
Timeline |
Scandinavian Medical |
Strategic Investments |
Scandinavian Medical and Strategic Investments Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Scandinavian Medical and Strategic Investments
The main advantage of trading using opposite Scandinavian Medical and Strategic Investments positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Scandinavian Medical position performs unexpectedly, Strategic Investments 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 Strategic Investments will offset losses from the drop in Strategic Investments' long position.Scandinavian Medical vs. Nordinvestments AS | Scandinavian Medical vs. TROPHY GAMES Development | Scandinavian Medical vs. Fynske Bank AS | Scandinavian Medical vs. FOM Technologies AS |
Strategic Investments vs. Newcap Holding AS | Strategic Investments vs. SKAKO AS | Strategic Investments vs. Rovsing AS |
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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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