Correlation Between Sectra AB and Xvivo Perfusion

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

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

Diversification Opportunities for Sectra AB and Xvivo Perfusion

-0.27

Correlation Coefficient

Sectra AB  Xvivo Perfusion

Very good diversification

The 3 months correlation between Sectra and Xvivo is -0.27. Overlapping area represents the amount of risk that can be diversified away by holding Sectra AB and Xvivo Perfusion AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Xvivo Perfusion AB and Sectra AB 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 Sectra AB are associated (or correlated) with Xvivo Perfusion. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Xvivo Perfusion AB has no effect on the direction of Sectra AB i.e., Sectra AB and Xvivo Perfusion go up and down completely randomly.

Pair Corralation between Sectra AB and Xvivo Perfusion

Assuming the 90 days trading horizon Sectra AB is expected to generate 0.78 times more return on investment than Xvivo Perfusion. However, Sectra AB is 1.29 times less risky than Xvivo Perfusion. It trades about 0.09 of its potential returns per unit of risk. Xvivo Perfusion AB is currently generating about -0.06 per unit of risk. If you would invest  26,140  in Sectra AB on September 12, 2024 and sell it today you would earn a total of  2,125  from holding Sectra AB or generate 8.13% return on investment over 90 days.

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

Sectra AB  vs.  Xvivo Perfusion AB

Sectra AB

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Sectra AB are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. Despite somewhat uncertain fundamental indicators, Sectra AB may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Xvivo Perfusion AB

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Xvivo Perfusion AB has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest uncertain performance, the Stock's basic indicators remain stable and the newest uproar on Wall Street may also be a sign of mid-term gains for the firm private investors.

Pair Trading with Sectra AB and Xvivo Perfusion

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

The idea behind Sectra AB and Xvivo Perfusion 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.

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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..