Correlation Between Stenocare and Photocure

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

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

Diversification Opportunities for Stenocare and Photocure

0.55

Correlation Coefficient

Stenocare  Photocure

Very weak diversification

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

Pair Corralation between Stenocare and Photocure

Assuming the 90 days trading horizon Stenocare AS is expected to generate 2.88 times more return on investment than Photocure. However, Stenocare is 2.88 times more volatile than Photocure. It trades about 0.22 of its potential returns per unit of risk. Photocure is currently generating about 0.08 per unit of risk. If you would invest  31.00  in Stenocare AS on April 24, 2025 and sell it today you would earn a total of  35.00  from holding Stenocare AS or generate 112.9% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	98.36%
Values	Daily Returns

Stenocare AS  vs.  Photocure

Stenocare AS

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Stenocare AS are ranked lower than 17 (%) of all global equities and portfolios over the last 90 days. In spite of rather unfluctuating fundamental indicators, Stenocare exhibited solid returns over the last few months and may actually be approaching a breakup point.

Photocure

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Photocure are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. Despite quite conflicting basic indicators, Photocure may actually be approaching a critical reversion point that can send shares even higher in August 2025.

Pair Trading with Stenocare and Photocure

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

The idea behind Stenocare AS and Photocure 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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.