Correlation Between Deep Value and Medistim ASA
Can any of the company-specific risk be diversified away by investing in both Deep Value and Medistim ASA 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 Deep Value and Medistim ASA into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Deep Value Driller and Medistim ASA, you can compare the effects of market volatilities on Deep Value and Medistim ASA 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 Deep Value with a short position of Medistim ASA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Deep Value and Medistim ASA.
Diversification Opportunities for Deep Value and Medistim ASA
0.79 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Deep and Medistim is 0.79. Overlapping area represents the amount of risk that can be diversified away by holding Deep Value Driller and Medistim ASA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Medistim ASA and Deep Value 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 Deep Value Driller are associated (or correlated) with Medistim ASA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Medistim ASA has no effect on the direction of Deep Value i.e., Deep Value and Medistim ASA go up and down completely randomly.
Pair Corralation between Deep Value and Medistim ASA
Assuming the 90 days trading horizon Deep Value Driller is expected to under-perform the Medistim ASA. In addition to that, Deep Value is 1.23 times more volatile than Medistim ASA. It trades about -0.01 of its total potential returns per unit of risk. Medistim ASA is currently generating about 0.04 per unit of volatility. If you would invest 16,973 in Medistim ASA on March 22, 2025 and sell it today you would earn a total of 3,027 from holding Medistim ASA or generate 17.83% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Deep Value Driller vs. Medistim ASA
Performance |
| Timeline |
| Deep Value Driller |
| Medistim ASA |
Deep Value and Medistim ASA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Deep Value and Medistim ASA
The main advantage of trading using opposite Deep Value and Medistim ASA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Deep Value position performs unexpectedly, Medistim ASA 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 Medistim ASA will offset losses from the drop in Medistim ASA's long position.| Deep Value vs. Napatech AS | Deep Value vs. Pareto Bank ASA | Deep Value vs. Proximar Seafood AS | Deep Value vs. Xplora Technologies As |
| Medistim ASA vs. Kitron ASA | Medistim ASA vs. Photocure | Medistim ASA vs. AF Gruppen ASA | Medistim ASA vs. Borregaard ASA |
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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
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