Correlation Between Devyser Diagnostics and Sectra AB

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

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

Diversification Opportunities for Devyser Diagnostics and Sectra AB

0.55

Correlation Coefficient

Devyser Diagnostics  Sectra AB

Very weak diversification

The 3 months correlation between Devyser and Sectra is 0.55. Overlapping area represents the amount of risk that can be diversified away by holding Devyser Diagnostics AB and Sectra AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sectra AB and Devyser Diagnostics 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 Devyser Diagnostics AB are associated (or correlated) with Sectra AB. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sectra AB has no effect on the direction of Devyser Diagnostics i.e., Devyser Diagnostics and Sectra AB go up and down completely randomly.

Pair Corralation between Devyser Diagnostics and Sectra AB

Assuming the 90 days trading horizon Devyser Diagnostics AB is expected to generate 1.3 times more return on investment than Sectra AB. However, Devyser Diagnostics is 1.3 times more volatile than Sectra AB. It trades about 0.21 of its potential returns per unit of risk. Sectra AB is currently generating about 0.27 per unit of risk. If you would invest  10,000  in Devyser Diagnostics AB on April 22, 2025 and sell it today you would earn a total of  3,360  from holding Devyser Diagnostics AB or generate 33.6% return on investment over 90 days.

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

Devyser Diagnostics AB  vs.  Sectra AB

Devyser Diagnostics

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Devyser Diagnostics AB are ranked lower than 16 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively weak basic indicators, Devyser Diagnostics unveiled solid returns over the last few months and may actually be approaching a breakup point.

Sectra AB

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Sectra AB are ranked lower than 20 (%) of all global equities and portfolios over the last 90 days. Despite somewhat uncertain fundamental indicators, Sectra AB sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Devyser Diagnostics and Sectra AB

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

The idea behind Devyser Diagnostics AB and Sectra 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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.