Correlation Between Surgical Science and Chordate Medical
Can any of the company-specific risk be diversified away by investing in both Surgical Science and Chordate Medical 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 Surgical Science and Chordate Medical into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Surgical Science Sweden and Chordate Medical Holding, you can compare the effects of market volatilities on Surgical Science and Chordate Medical 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 Surgical Science with a short position of Chordate Medical. Check out your portfolio center. Please also check ongoing floating volatility patterns of Surgical Science and Chordate Medical.
Diversification Opportunities for Surgical Science and Chordate Medical
-0.78 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Surgical and Chordate is -0.78. Overlapping area represents the amount of risk that can be diversified away by holding Surgical Science Sweden and Chordate Medical Holding in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Chordate Medical Holding and Surgical Science 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 Surgical Science Sweden are associated (or correlated) with Chordate Medical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Chordate Medical Holding has no effect on the direction of Surgical Science i.e., Surgical Science and Chordate Medical go up and down completely randomly.
Pair Corralation between Surgical Science and Chordate Medical
Assuming the 90 days trading horizon Surgical Science Sweden is expected to generate 0.73 times more return on investment than Chordate Medical. However, Surgical Science Sweden is 1.37 times less risky than Chordate Medical. It trades about 0.22 of its potential returns per unit of risk. Chordate Medical Holding is currently generating about -0.58 per unit of risk. If you would invest 12,370 in Surgical Science Sweden on September 23, 2024 and sell it today you would earn a total of 3,780 from holding Surgical Science Sweden or generate 30.56% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Weak |
Accuracy | 100.0% |
Values | Daily Returns |
Surgical Science Sweden vs. Chordate Medical Holding
Performance |
Timeline |
Surgical Science Sweden |
Chordate Medical Holding |
Surgical Science and Chordate Medical Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Surgical Science and Chordate Medical
The main advantage of trading using opposite Surgical Science and Chordate Medical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Surgical Science position performs unexpectedly, Chordate Medical 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 Chordate Medical will offset losses from the drop in Chordate Medical's long position.Surgical Science vs. BICO Group AB | Surgical Science vs. Hexatronic Group AB | Surgical Science vs. Swedencare publ AB | Surgical Science vs. MIPS AB |
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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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.
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