Correlation Between Surgical Science and IAR Systems
Can any of the company-specific risk be diversified away by investing in both Surgical Science and IAR Systems 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 IAR Systems 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 IAR Systems Group, you can compare the effects of market volatilities on Surgical Science and IAR Systems 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 IAR Systems. Check out your portfolio center. Please also check ongoing floating volatility patterns of Surgical Science and IAR Systems.
Diversification Opportunities for Surgical Science and IAR Systems
-0.22 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Surgical and IAR is -0.22. Overlapping area represents the amount of risk that can be diversified away by holding Surgical Science Sweden and IAR Systems Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on IAR Systems Group 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 IAR Systems. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of IAR Systems Group has no effect on the direction of Surgical Science i.e., Surgical Science and IAR Systems go up and down completely randomly.
Pair Corralation between Surgical Science and IAR Systems
Assuming the 90 days trading horizon Surgical Science Sweden is expected to generate 1.09 times more return on investment than IAR Systems. However, Surgical Science is 1.09 times more volatile than IAR Systems Group. It trades about 0.16 of its potential returns per unit of risk. IAR Systems Group is currently generating about -0.04 per unit of risk. If you would invest 11,860 in Surgical Science Sweden on September 15, 2024 and sell it today you would earn a total of 3,480 from holding Surgical Science Sweden or generate 29.34% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Insignificant |
Accuracy | 100.0% |
Values | Daily Returns |
Surgical Science Sweden vs. IAR Systems Group
Performance |
Timeline |
Surgical Science Sweden |
IAR Systems Group |
Surgical Science and IAR Systems Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Surgical Science and IAR Systems
The main advantage of trading using opposite Surgical Science and IAR Systems positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Surgical Science position performs unexpectedly, IAR Systems 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 IAR Systems will offset losses from the drop in IAR Systems' 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 |
IAR Systems vs. Lime Technologies AB | IAR Systems vs. FormPipe Software AB | IAR Systems vs. Surgical Science Sweden | IAR Systems vs. Teqnion 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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.
Other Complementary Tools
Commodity Channel Use Commodity Channel Index to analyze current equity momentum | |
Theme Ratings Determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
Efficient Frontier Plot and analyze your portfolio and positions against risk-return landscape of the market. | |
Crypto Correlations Use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins | |
Correlation Analysis Reduce portfolio risk simply by holding instruments which are not perfectly correlated |