Correlation Between Surgical Science and Dignitana

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

Diversification Opportunities for Surgical Science and Dignitana

-0.52

Correlation Coefficient

Surgical Science  Dignitana

Excellent diversification

The 3 months correlation between Surgical and Dignitana is -0.52. Overlapping area represents the amount of risk that can be diversified away by holding Surgical Science Sweden and Dignitana AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dignitana AB 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 Dignitana. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dignitana AB has no effect on the direction of Surgical Science i.e., Surgical Science and Dignitana go up and down completely randomly.

Pair Corralation between Surgical Science and Dignitana

Assuming the 90 days trading horizon Surgical Science Sweden is expected to generate 0.53 times more return on investment than Dignitana. However, Surgical Science Sweden is 1.88 times less risky than Dignitana. It trades about -0.01 of its potential returns per unit of risk. Dignitana AB is currently generating about -0.02 per unit of risk. If you would invest  23,636  in Surgical Science Sweden on October 23, 2024 and sell it today you would lose (6,136) from holding Surgical Science Sweden or give up 25.96% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	99.74%
Values	Daily Returns

Surgical Science Sweden  vs.  Dignitana AB

Surgical Science Sweden

Risk-Adjusted Performance

14 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Surgical Science Sweden are ranked lower than 14 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, Surgical Science unveiled solid returns over the last few months and may actually be approaching a breakup point.

Dignitana AB

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Dignitana AB has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of weak performance in the last few months, the Stock's basic indicators remain comparatively stable which may send shares a bit higher in February 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Pair Trading with Surgical Science and Dignitana

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

The idea behind Surgical Science Sweden and Dignitana 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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.