Correlation Between 4C Group and B3 Consulting
Can any of the company-specific risk be diversified away by investing in both 4C Group and B3 Consulting 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 4C Group and B3 Consulting into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between 4C Group AB and B3 Consulting Group, you can compare the effects of market volatilities on 4C Group and B3 Consulting 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 4C Group with a short position of B3 Consulting. Check out your portfolio center. Please also check ongoing floating volatility patterns of 4C Group and B3 Consulting.
Diversification Opportunities for 4C Group and B3 Consulting
0.58 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between 4C Group and B3 Consulting is 0.58. Overlapping area represents the amount of risk that can be diversified away by holding 4C Group AB and B3 Consulting Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on B3 Consulting Group and 4C Group 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 4C Group AB are associated (or correlated) with B3 Consulting. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of B3 Consulting Group has no effect on the direction of 4C Group i.e., 4C Group and B3 Consulting go up and down completely randomly.
Pair Corralation between 4C Group and B3 Consulting
Assuming the 90 days horizon 4C Group AB is expected to under-perform the B3 Consulting. In addition to that, 4C Group is 1.41 times more volatile than B3 Consulting Group. It trades about -0.05 of its total potential returns per unit of risk. B3 Consulting Group is currently generating about -0.03 per unit of volatility. If you would invest 13,430 in B3 Consulting Group on September 24, 2024 and sell it today you would lose (6,180) from holding B3 Consulting Group or give up 46.02% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
4C Group AB vs. B3 Consulting Group
Performance |
| Timeline |
| 4C Group AB |
| B3 Consulting Group |
4C Group and B3 Consulting Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with 4C Group and B3 Consulting
The main advantage of trading using opposite 4C Group and B3 Consulting positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if 4C Group position performs unexpectedly, B3 Consulting 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 B3 Consulting will offset losses from the drop in B3 Consulting's long position.| 4C Group vs. B3 Consulting Group | 4C Group vs. Sleep Cycle AB | 4C Group vs. Avensia publ AB | 4C Group vs. CAG Group AB |
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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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.
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