Correlation Between Vitrolife and Combigene

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

By analyzing existing cross correlation between Vitrolife AB and Combigene AB, you can compare the effects of market volatilities on Vitrolife and Combigene 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 Combigene. Check out your portfolio center. Please also check ongoing floating volatility patterns of Vitrolife and Combigene.

Diversification Opportunities for Vitrolife and Combigene

-0.66

Correlation Coefficient

Vitrolife  Combigene

Excellent diversification

The 3 months correlation between Vitrolife and Combigene is -0.66. Overlapping area represents the amount of risk that can be diversified away by holding Vitrolife AB and Combigene AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Combigene AB 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 Combigene. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Combigene AB has no effect on the direction of Vitrolife i.e., Vitrolife and Combigene go up and down completely randomly.

Pair Corralation between Vitrolife and Combigene

Assuming the 90 days trading horizon Vitrolife AB is expected to generate 0.94 times more return on investment than Combigene. However, Vitrolife AB is 1.06 times less risky than Combigene. It trades about 0.1 of its potential returns per unit of risk. Combigene AB is currently generating about -0.1 per unit of risk. If you would invest  23,040  in Vitrolife AB on July 1, 2024 and sell it today you would earn a total of  2,460  from holding Vitrolife AB or generate 10.68% return on investment over 90 days.

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

Vitrolife AB  vs.  Combigene AB

Vitrolife AB

Risk-Adjusted Performance

12 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Vitrolife AB are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, Vitrolife unveiled solid returns over the last few months and may actually be approaching a breakup point.

Combigene AB

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Combigene 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 October 2024. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Pair Trading with Vitrolife and Combigene

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

The idea behind Vitrolife AB and Combigene 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 Portfolio Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.