Correlation Between TROPHY GAMES and Scandinavian Medical

Can any of the company-specific risk be diversified away by investing in both TROPHY GAMES and Scandinavian 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 TROPHY GAMES and Scandinavian Medical into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between TROPHY GAMES Development and Scandinavian Medical Solutions, you can compare the effects of market volatilities on TROPHY GAMES and Scandinavian 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 TROPHY GAMES with a short position of Scandinavian Medical. Check out your portfolio center. Please also check ongoing floating volatility patterns of TROPHY GAMES and Scandinavian Medical.

Diversification Opportunities for TROPHY GAMES and Scandinavian Medical

-0.15

Correlation Coefficient

TROPHY GAMES  Scandinavian Medical

Good diversification

The 3 months correlation between TROPHY and Scandinavian is -0.15. Overlapping area represents the amount of risk that can be diversified away by holding TROPHY GAMES Development and Scandinavian Medical Solutions in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Scandinavian Medical and TROPHY GAMES 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 TROPHY GAMES Development are associated (or correlated) with Scandinavian Medical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Scandinavian Medical has no effect on the direction of TROPHY GAMES i.e., TROPHY GAMES and Scandinavian Medical go up and down completely randomly.

Pair Corralation between TROPHY GAMES and Scandinavian Medical

Assuming the 90 days trading horizon TROPHY GAMES Development is expected to generate 0.75 times more return on investment than Scandinavian Medical. However, TROPHY GAMES Development is 1.34 times less risky than Scandinavian Medical. It trades about 0.08 of its potential returns per unit of risk. Scandinavian Medical Solutions is currently generating about -0.09 per unit of risk. If you would invest  600.00  in TROPHY GAMES Development on December 26, 2024 and sell it today you would earn a total of  80.00  from holding TROPHY GAMES Development or generate 13.33% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

TROPHY GAMES Development  vs.  Scandinavian Medical Solutions

TROPHY GAMES Development

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in TROPHY GAMES Development are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, TROPHY GAMES sustained solid returns over the last few months and may actually be approaching a breakup point.

Scandinavian Medical

Risk-Adjusted Performance

Very Weak

Over the last 90 days Scandinavian Medical Solutions has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's basic indicators remain somewhat strong which may send shares a bit higher in April 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Pair Trading with TROPHY GAMES and Scandinavian Medical

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

The idea behind TROPHY GAMES Development and Scandinavian Medical Solutions 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 CEOs Directory module to screen CEOs from public companies around the world.