Correlation Between Senzime AB and ProstaLund

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

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

Diversification Opportunities for Senzime AB and ProstaLund

0.76

Correlation Coefficient

Senzime AB  ProstaLund

Poor diversification

The 3 months correlation between Senzime and ProstaLund is 0.76. Overlapping area represents the amount of risk that can be diversified away by holding Senzime AB and ProstaLund AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ProstaLund AB and Senzime 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 Senzime AB are associated (or correlated) with ProstaLund. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ProstaLund AB has no effect on the direction of Senzime AB i.e., Senzime AB and ProstaLund go up and down completely randomly.

Pair Corralation between Senzime AB and ProstaLund

Assuming the 90 days trading horizon Senzime AB is expected to generate 0.82 times more return on investment than ProstaLund. However, Senzime AB is 1.21 times less risky than ProstaLund. It trades about -0.01 of its potential returns per unit of risk. ProstaLund AB is currently generating about -0.08 per unit of risk. If you would invest  1,100  in Senzime AB on September 28, 2024 and sell it today you would lose (522.00) from holding Senzime AB or give up 47.45% of portfolio value over 90 days.

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

Senzime AB  vs.  ProstaLund AB

Senzime AB

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Senzime 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.

ProstaLund AB

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days ProstaLund 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 Senzime AB and ProstaLund

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

The idea behind Senzime AB and ProstaLund 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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.