Correlation Between Photocure and Medistim ASA
Can any of the company-specific risk be diversified away by investing in both Photocure 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 Photocure and Medistim ASA into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Photocure and Medistim ASA, you can compare the effects of market volatilities on Photocure 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 Photocure with a short position of Medistim ASA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Photocure and Medistim ASA.
Diversification Opportunities for Photocure and Medistim ASA
-0.55 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Photocure and Medistim is -0.55. Overlapping area represents the amount of risk that can be diversified away by holding Photocure and Medistim ASA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Medistim ASA and Photocure 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 Photocure 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 Photocure i.e., Photocure and Medistim ASA go up and down completely randomly.
Pair Corralation between Photocure and Medistim ASA
Assuming the 90 days trading horizon Photocure is expected to generate 1.23 times more return on investment than Medistim ASA. However, Photocure is 1.23 times more volatile than Medistim ASA. It trades about 0.02 of its potential returns per unit of risk. Medistim ASA is currently generating about -0.01 per unit of risk. If you would invest 4,735 in Photocure on March 23, 2025 and sell it today you would earn a total of 315.00 from holding Photocure or generate 6.65% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Photocure vs. Medistim ASA
Performance |
| Timeline |
| Photocure |
| Medistim ASA |
Photocure and Medistim ASA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Photocure and Medistim ASA
The main advantage of trading using opposite Photocure and Medistim ASA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Photocure 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.| Photocure vs. Melhus Sparebank | Photocure vs. Pareto Bank ASA | Photocure vs. Sparebank 1 SMN | Photocure vs. Eidesvik Offshore ASA |
| 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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.
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