Correlation Between Vitrolife and Sectra AB

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

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

Diversification Opportunities for Vitrolife and Sectra AB

-0.42

Correlation Coefficient

Vitrolife  Sectra AB

Very good diversification

The 3 months correlation between Vitrolife and Sectra is -0.42. Overlapping area represents the amount of risk that can be diversified away by holding Vitrolife AB and Sectra AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sectra AB and Vitrolife 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 Vitrolife 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 Vitrolife i.e., Vitrolife and Sectra AB go up and down completely randomly.

Pair Corralation between Vitrolife and Sectra AB

Assuming the 90 days trading horizon Vitrolife is expected to generate 24.89 times less return on investment than Sectra AB. In addition to that, Vitrolife is 1.18 times more volatile than Sectra AB. It trades about 0.01 of its total potential returns per unit of risk. Sectra AB is currently generating about 0.25 per unit of volatility. If you would invest  27,520  in Sectra AB on April 24, 2025 and sell it today you would earn a total of  8,480  from holding Sectra AB or generate 30.81% return on investment over 90 days.

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

Vitrolife AB  vs.  Sectra AB

Vitrolife AB

Risk-Adjusted Performance

Very Weak

Over the last 90 days Vitrolife AB has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, Vitrolife is not utilizing all of its potentials. The current stock price uproar, may contribute to short-horizon losses for the private investors.

Sectra AB

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Sectra AB are ranked lower than 19 (%) 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 Vitrolife and Sectra AB

The main advantage of trading using opposite Vitrolife and Sectra AB positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Vitrolife 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 Vitrolife 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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.