Correlation Between Sedana Medical and Stille AB

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

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

Diversification Opportunities for Sedana Medical and Stille AB

0.06

Correlation Coefficient

Sedana Medical  Stille AB

Significant diversification

The 3 months correlation between Sedana and Stille is 0.06. Overlapping area represents the amount of risk that can be diversified away by holding Sedana Medical AB and Stille AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Stille AB and Sedana 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 Sedana Medical AB are associated (or correlated) with Stille AB. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Stille AB has no effect on the direction of Sedana Medical i.e., Sedana Medical and Stille AB go up and down completely randomly.

Pair Corralation between Sedana Medical and Stille AB

Assuming the 90 days trading horizon Sedana Medical AB is expected to generate 1.42 times more return on investment than Stille AB. However, Sedana Medical is 1.42 times more volatile than Stille AB. It trades about 0.13 of its potential returns per unit of risk. Stille AB is currently generating about 0.05 per unit of risk. If you would invest  1,072  in Sedana Medical AB on April 23, 2025 and sell it today you would earn a total of  308.00  from holding Sedana Medical AB or generate 28.73% return on investment over 90 days.

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

Sedana Medical AB  vs.  Stille AB

Sedana Medical AB

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Sedana Medical AB are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak fundamental indicators, Sedana Medical sustained solid returns over the last few months and may actually be approaching a breakup point.

Stille AB

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Stille AB are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, Stille AB may actually be approaching a critical reversion point that can send shares even higher in August 2025.

Pair Trading with Sedana Medical and Stille AB

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

The idea behind Sedana Medical AB and Stille 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.

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 Portfolio Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.