Correlation Between SCANDMEDICAL SOLDK-040 and Vale SA

Can any of the company-specific risk be diversified away by investing in both SCANDMEDICAL SOLDK-040 and Vale SA 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 SCANDMEDICAL SOLDK-040 and Vale SA into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between SCANDMEDICAL SOLDK 040 and Vale SA, you can compare the effects of market volatilities on SCANDMEDICAL SOLDK-040 and Vale SA 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 SCANDMEDICAL SOLDK-040 with a short position of Vale SA. Check out your portfolio center. Please also check ongoing floating volatility patterns of SCANDMEDICAL SOLDK-040 and Vale SA.

Diversification Opportunities for SCANDMEDICAL SOLDK-040 and Vale SA

0.16

Correlation Coefficient

SCANDMEDICAL SOLDK-040  Vale SA

Average diversification

The 3 months correlation between SCANDMEDICAL and Vale is 0.16. Overlapping area represents the amount of risk that can be diversified away by holding SCANDMEDICAL SOLDK 040 and Vale SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Vale SA and SCANDMEDICAL SOLDK-040 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 SCANDMEDICAL SOLDK 040 are associated (or correlated) with Vale SA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Vale SA has no effect on the direction of SCANDMEDICAL SOLDK-040 i.e., SCANDMEDICAL SOLDK-040 and Vale SA go up and down completely randomly.

Pair Corralation between SCANDMEDICAL SOLDK-040 and Vale SA

Assuming the 90 days horizon SCANDMEDICAL SOLDK 040 is expected to generate 1.63 times more return on investment than Vale SA. However, SCANDMEDICAL SOLDK-040 is 1.63 times more volatile than Vale SA. It trades about 0.1 of its potential returns per unit of risk. Vale SA is currently generating about 0.03 per unit of risk. If you would invest  52.00  in SCANDMEDICAL SOLDK 040 on April 23, 2025 and sell it today you would earn a total of  8.00  from holding SCANDMEDICAL SOLDK 040 or generate 15.38% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	98.44%
Values	Daily Returns

SCANDMEDICAL SOLDK 040  vs.  Vale SA

SCANDMEDICAL SOLDK 040

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in SCANDMEDICAL SOLDK 040 are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, SCANDMEDICAL SOLDK-040 reported solid returns over the last few months and may actually be approaching a breakup point.

Vale SA

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Vale SA are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Despite nearly stable essential indicators, Vale SA is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with SCANDMEDICAL SOLDK-040 and Vale SA

The main advantage of trading using opposite SCANDMEDICAL SOLDK-040 and Vale SA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SCANDMEDICAL SOLDK-040 position performs unexpectedly, Vale SA 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 Vale SA will offset losses from the drop in Vale SA's long position.

The idea behind SCANDMEDICAL SOLDK 040 and Vale SA 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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.