Correlation Between Spago Nanomedical and Metacon AB
Can any of the company-specific risk be diversified away by investing in both Spago Nanomedical and Metacon AB 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 Spago Nanomedical and Metacon AB into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Spago Nanomedical AB and Metacon AB, you can compare the effects of market volatilities on Spago Nanomedical and Metacon AB 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 Spago Nanomedical with a short position of Metacon AB. Check out your portfolio center. Please also check ongoing floating volatility patterns of Spago Nanomedical and Metacon AB.
Diversification Opportunities for Spago Nanomedical and Metacon AB
0.62 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Spago and Metacon is 0.62. Overlapping area represents the amount of risk that can be diversified away by holding Spago Nanomedical AB and Metacon AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Metacon AB and Spago Nanomedical 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 Spago Nanomedical AB are associated (or correlated) with Metacon AB. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Metacon AB has no effect on the direction of Spago Nanomedical i.e., Spago Nanomedical and Metacon AB go up and down completely randomly.
Pair Corralation between Spago Nanomedical and Metacon AB
Assuming the 90 days trading horizon Spago Nanomedical AB is expected to generate 0.57 times more return on investment than Metacon AB. However, Spago Nanomedical AB is 1.74 times less risky than Metacon AB. It trades about 0.32 of its potential returns per unit of risk. Metacon AB is currently generating about -0.19 per unit of risk. If you would invest 18.00 in Spago Nanomedical AB on October 9, 2024 and sell it today you would earn a total of 4.00 from holding Spago Nanomedical AB or generate 22.22% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Significant |
Accuracy | 100.0% |
Values | Daily Returns |
Spago Nanomedical AB vs. Metacon AB
Performance |
Timeline |
Spago Nanomedical |
Metacon AB |
Spago Nanomedical and Metacon AB Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Spago Nanomedical and Metacon AB
The main advantage of trading using opposite Spago Nanomedical and Metacon AB positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Spago Nanomedical position performs unexpectedly, Metacon AB 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 Metacon AB will offset losses from the drop in Metacon AB's long position.The idea behind Spago Nanomedical AB and Metacon 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.Metacon AB vs. Viaplay Group AB | Metacon AB vs. Nordic Asia Investment | Metacon AB vs. Adventure Box Technology | Metacon AB vs. Scandic Hotels Group |
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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.
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