Correlation Between Redsense Medical and Corline Biomedical

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

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

Diversification Opportunities for Redsense Medical and Corline Biomedical

-0.26

Correlation Coefficient

Redsense Medical  Corline Biomedical

Very good diversification

The 3 months correlation between Redsense and Corline is -0.26. Overlapping area represents the amount of risk that can be diversified away by holding Redsense Medical AB and Corline Biomedical AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Corline Biomedical and Redsense Medical 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 Redsense Medical AB are associated (or correlated) with Corline Biomedical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Corline Biomedical has no effect on the direction of Redsense Medical i.e., Redsense Medical and Corline Biomedical go up and down completely randomly.

Pair Corralation between Redsense Medical and Corline Biomedical

Assuming the 90 days trading horizon Redsense Medical is expected to generate 10.46 times less return on investment than Corline Biomedical. But when comparing it to its historical volatility, Redsense Medical AB is 1.09 times less risky than Corline Biomedical. It trades about 0.02 of its potential returns per unit of risk. Corline Biomedical AB is currently generating about 0.17 of returns per unit of risk over similar time horizon. If you would invest  946.00  in Corline Biomedical AB on April 24, 2025 and sell it today you would earn a total of  354.00  from holding Corline Biomedical AB or generate 37.42% return on investment over 90 days.

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

Redsense Medical AB  vs.  Corline Biomedical AB

Redsense Medical

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Redsense Medical AB are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable basic indicators, Redsense Medical is not utilizing all of its potentials. The current stock price uproar, may contribute to short-horizon losses for the private investors.

Corline Biomedical

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Corline Biomedical AB are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, Corline Biomedical unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Redsense Medical and Corline Biomedical

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

The idea behind Redsense Medical AB and Corline Biomedical 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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.