Correlation Between Absolent Group and Cinis Fertilizer
Can any of the company-specific risk be diversified away by investing in both Absolent Group and Cinis Fertilizer 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 Absolent Group and Cinis Fertilizer into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Absolent Group AB and Cinis Fertilizer AB, you can compare the effects of market volatilities on Absolent Group and Cinis Fertilizer 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 Absolent Group with a short position of Cinis Fertilizer. Check out your portfolio center. Please also check ongoing floating volatility patterns of Absolent Group and Cinis Fertilizer.
Diversification Opportunities for Absolent Group and Cinis Fertilizer
0.79 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Absolent and Cinis is 0.79. Overlapping area represents the amount of risk that can be diversified away by holding Absolent Group AB and Cinis Fertilizer AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cinis Fertilizer and Absolent 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 Absolent Group AB are associated (or correlated) with Cinis Fertilizer. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cinis Fertilizer has no effect on the direction of Absolent Group i.e., Absolent Group and Cinis Fertilizer go up and down completely randomly.
Pair Corralation between Absolent Group and Cinis Fertilizer
Assuming the 90 days trading horizon Absolent Group AB is expected to under-perform the Cinis Fertilizer. But the stock apears to be less risky and, when comparing its historical volatility, Absolent Group AB is 2.87 times less risky than Cinis Fertilizer. The stock trades about -0.77 of its potential returns per unit of risk. The Cinis Fertilizer AB is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest 1,580 in Cinis Fertilizer AB on August 28, 2024 and sell it today you would lose (28.00) from holding Cinis Fertilizer AB or give up 1.77% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Absolent Group AB vs. Cinis Fertilizer AB
Performance |
| Timeline |
| Absolent Group AB |
| Cinis Fertilizer |
Absolent Group and Cinis Fertilizer Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Absolent Group and Cinis Fertilizer
The main advantage of trading using opposite Absolent Group and Cinis Fertilizer positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Absolent Group position performs unexpectedly, Cinis Fertilizer 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 Cinis Fertilizer will offset losses from the drop in Cinis Fertilizer's long position.| Absolent Group vs. Lagercrantz Group AB | Absolent Group vs. Addtech AB | Absolent Group vs. AddLife AB | Absolent Group vs. Bufab Holding 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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.
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