Correlation Between Swedish Orphan and Xvivo Perfusion

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

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

Diversification Opportunities for Swedish Orphan and Xvivo Perfusion

-0.13

Correlation Coefficient

Swedish Orphan  Xvivo Perfusion

Good diversification

The 3 months correlation between Swedish and Xvivo is -0.13. Overlapping area represents the amount of risk that can be diversified away by holding Swedish Orphan Biovitrum and Xvivo Perfusion AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Xvivo Perfusion AB and Swedish Orphan 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 Swedish Orphan Biovitrum are associated (or correlated) with Xvivo Perfusion. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Xvivo Perfusion AB has no effect on the direction of Swedish Orphan i.e., Swedish Orphan and Xvivo Perfusion go up and down completely randomly.

Pair Corralation between Swedish Orphan and Xvivo Perfusion

Assuming the 90 days trading horizon Swedish Orphan is expected to generate 1.02 times less return on investment than Xvivo Perfusion. But when comparing it to its historical volatility, Swedish Orphan Biovitrum is 1.37 times less risky than Xvivo Perfusion. It trades about 0.06 of its potential returns per unit of risk. Xvivo Perfusion AB is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest  43,150  in Xvivo Perfusion AB on October 13, 2024 and sell it today you would earn a total of  5,850  from holding Xvivo Perfusion AB or generate 13.56% return on investment over 90 days.

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

Swedish Orphan Biovitrum  vs.  Xvivo Perfusion AB

Swedish Orphan Biovitrum

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Swedish Orphan Biovitrum are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively weak basic indicators, Swedish Orphan may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Xvivo Perfusion AB

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Xvivo Perfusion AB has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, Xvivo Perfusion 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 Swedish Orphan and Xvivo Perfusion

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

The idea behind Swedish Orphan Biovitrum and Xvivo Perfusion 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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.