Correlation Between Sedana Medical and Corline Biomedical

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

By analyzing existing cross correlation between Sedana Medical AB and Corline Biomedical AB, you can compare the effects of market volatilities on Sedana Medical and Corline Biomedical 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 Sedana Medical with a short position of Corline Biomedical. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sedana Medical and Corline Biomedical.

Diversification Opportunities for Sedana Medical and Corline Biomedical

0.74

Correlation Coefficient

Sedana Medical  Corline Biomedical

Poor diversification

The 3 months correlation between Sedana and Corline is 0.74. Overlapping area represents the amount of risk that can be diversified away by holding Sedana Medical AB and Corline Biomedical AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Corline Biomedical and Sedana Medical 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 Sedana Medical AB are associated (or correlated) with Corline Biomedical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Corline Biomedical has no effect on the direction of Sedana Medical i.e., Sedana Medical and Corline Biomedical go up and down completely randomly.

Pair Corralation between Sedana Medical and Corline Biomedical

Assuming the 90 days trading horizon Sedana Medical AB is expected to under-perform the Corline Biomedical. In addition to that, Sedana Medical is 1.28 times more volatile than Corline Biomedical AB. It trades about -0.13 of its total potential returns per unit of risk. Corline Biomedical AB is currently generating about -0.06 per unit of volatility. If you would invest  880.00  in Corline Biomedical AB on September 4, 2024 and sell it today you would lose (172.00) from holding Corline Biomedical AB or give up 19.55% of portfolio value over 90 days.

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

Sedana Medical AB  vs.  Corline Biomedical AB

Sedana Medical AB

Risk-Adjusted Performance

0 of 100

Very Weak

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

Corline Biomedical

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Corline Biomedical 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 January 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Pair Trading with Sedana Medical and Corline Biomedical

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

The idea behind Sedana Medical AB and Corline Biomedical 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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.