Correlation Between Surgical Science and Epiroc AB
Can any of the company-specific risk be diversified away by investing in both Surgical Science and Epiroc 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 Surgical Science and Epiroc AB 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 Epiroc AB, you can compare the effects of market volatilities on Surgical Science and Epiroc 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 Surgical Science with a short position of Epiroc AB. Check out your portfolio center. Please also check ongoing floating volatility patterns of Surgical Science and Epiroc AB.
Diversification Opportunities for Surgical Science and Epiroc AB
-0.55 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Surgical and Epiroc is -0.55. Overlapping area represents the amount of risk that can be diversified away by holding Surgical Science Sweden and Epiroc AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Epiroc 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 Epiroc AB. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Epiroc AB has no effect on the direction of Surgical Science i.e., Surgical Science and Epiroc AB go up and down completely randomly.
Pair Corralation between Surgical Science and Epiroc AB
Assuming the 90 days trading horizon Surgical Science Sweden is expected to generate 1.12 times more return on investment than Epiroc AB. However, Surgical Science is 1.12 times more volatile than Epiroc AB. It trades about 0.26 of its potential returns per unit of risk. Epiroc AB is currently generating about 0.0 per unit of risk. If you would invest 14,850 in Surgical Science Sweden on September 24, 2024 and sell it today you would earn a total of 1,300 from holding Surgical Science Sweden or generate 8.75% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Very Weak |
Accuracy | 100.0% |
Values | Daily Returns |
Surgical Science Sweden vs. Epiroc AB
Performance |
Timeline |
Surgical Science Sweden |
Epiroc AB |
Surgical Science and Epiroc AB Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Surgical Science and Epiroc AB
The main advantage of trading using opposite Surgical Science and Epiroc AB positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Surgical Science position performs unexpectedly, Epiroc 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 Epiroc AB will offset losses from the drop in Epiroc AB'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 |
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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
Other Complementary Tools
Performance Analysis Check effects of mean-variance optimization against your current asset allocation | |
Portfolio Diagnostics Use generated alerts and portfolio events aggregator to diagnose current holdings | |
Portfolio Suggestion Get suggestions outside of your existing asset allocation including your own model portfolios | |
Analyst Advice Analyst recommendations and target price estimates broken down by several categories | |
Latest Portfolios Quick portfolio dashboard that showcases your latest portfolios |