Correlation Between 4C Group and Cyber Security
Can any of the company-specific risk be diversified away by investing in both 4C Group and Cyber Security 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 Cyber Security 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 Cyber Security 1, you can compare the effects of market volatilities on 4C Group and Cyber Security 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 Cyber Security. Check out your portfolio center. Please also check ongoing floating volatility patterns of 4C Group and Cyber Security.
Diversification Opportunities for 4C Group and Cyber Security
0.93 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between 4C Group and Cyber is 0.93. Overlapping area represents the amount of risk that can be diversified away by holding 4C Group AB and Cyber Security 1 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cyber Security 1 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 Cyber Security. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cyber Security 1 has no effect on the direction of 4C Group i.e., 4C Group and Cyber Security go up and down completely randomly.
Pair Corralation between 4C Group and Cyber Security
Assuming the 90 days horizon 4C Group AB is expected to generate 0.44 times more return on investment than Cyber Security. However, 4C Group AB is 2.27 times less risky than Cyber Security. It trades about -0.34 of its potential returns per unit of risk. Cyber Security 1 is currently generating about -0.23 per unit of risk. If you would invest 1,280 in 4C Group AB on September 24, 2024 and sell it today you would lose (245.00) from holding 4C Group AB or give up 19.14% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
4C Group AB vs. Cyber Security 1
Performance |
| Timeline |
| 4C Group AB |
| Cyber Security 1 |
4C Group and Cyber Security Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with 4C Group and Cyber Security
The main advantage of trading using opposite 4C Group and Cyber Security positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if 4C Group position performs unexpectedly, Cyber Security 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 Cyber Security will offset losses from the drop in Cyber Security'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 |
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 Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.
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