Correlation Between Vitrolife and Spago Nanomedical
Can any of the company-specific risk be diversified away by investing in both Vitrolife and Spago Nanomedical 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 Vitrolife and Spago Nanomedical into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Vitrolife AB and Spago Nanomedical AB, you can compare the effects of market volatilities on Vitrolife and Spago Nanomedical 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 Vitrolife with a short position of Spago Nanomedical. Check out your portfolio center. Please also check ongoing floating volatility patterns of Vitrolife and Spago Nanomedical.
Diversification Opportunities for Vitrolife and Spago Nanomedical
0.67 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Vitrolife and Spago is 0.67. Overlapping area represents the amount of risk that can be diversified away by holding Vitrolife AB and Spago Nanomedical AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Spago Nanomedical and Vitrolife 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 Vitrolife AB are associated (or correlated) with Spago Nanomedical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Spago Nanomedical has no effect on the direction of Vitrolife i.e., Vitrolife and Spago Nanomedical go up and down completely randomly.
Pair Corralation between Vitrolife and Spago Nanomedical
Assuming the 90 days trading horizon Vitrolife AB is expected to generate 0.52 times more return on investment than Spago Nanomedical. However, Vitrolife AB is 1.92 times less risky than Spago Nanomedical. It trades about 0.01 of its potential returns per unit of risk. Spago Nanomedical AB is currently generating about -0.02 per unit of risk. If you would invest 23,105 in Vitrolife AB on October 11, 2024 and sell it today you would lose (1,965) from holding Vitrolife AB or give up 8.5% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Significant |
Accuracy | 100.0% |
Values | Daily Returns |
Vitrolife AB vs. Spago Nanomedical AB
Performance |
Timeline |
Vitrolife AB |
Spago Nanomedical |
Vitrolife and Spago Nanomedical Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Vitrolife and Spago Nanomedical
The main advantage of trading using opposite Vitrolife and Spago Nanomedical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Vitrolife position performs unexpectedly, Spago Nanomedical 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 Spago Nanomedical will offset losses from the drop in Spago Nanomedical's long position.Vitrolife vs. SolTech Energy Sweden | Vitrolife vs. Vitec Software Group | Vitrolife vs. Scandinavian ChemoTech AB | Vitrolife vs. Kinnevik Investment 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 Portfolio Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
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