Correlation Between AlzeCure Pharma and Kancera AB
Can any of the company-specific risk be diversified away by investing in both AlzeCure Pharma and Kancera 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 AlzeCure Pharma and Kancera AB into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between AlzeCure Pharma and Kancera AB, you can compare the effects of market volatilities on AlzeCure Pharma and Kancera 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 AlzeCure Pharma with a short position of Kancera AB. Check out your portfolio center. Please also check ongoing floating volatility patterns of AlzeCure Pharma and Kancera AB.
Diversification Opportunities for AlzeCure Pharma and Kancera AB
0.9 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between AlzeCure and Kancera is 0.9. Overlapping area represents the amount of risk that can be diversified away by holding AlzeCure Pharma and Kancera AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kancera AB and AlzeCure Pharma 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 AlzeCure Pharma are associated (or correlated) with Kancera AB. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kancera AB has no effect on the direction of AlzeCure Pharma i.e., AlzeCure Pharma and Kancera AB go up and down completely randomly.
Pair Corralation between AlzeCure Pharma and Kancera AB
Assuming the 90 days trading horizon AlzeCure Pharma is expected to under-perform the Kancera AB. But the stock apears to be less risky and, when comparing its historical volatility, AlzeCure Pharma is 1.37 times less risky than Kancera AB. The stock trades about -0.03 of its potential returns per unit of risk. The Kancera AB is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest 216.00 in Kancera AB on September 1, 2024 and sell it today you would lose (119.00) from holding Kancera AB or give up 55.09% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 99.8% |
| Values | Daily Returns |
AlzeCure Pharma vs. Kancera AB
Performance |
| Timeline |
| AlzeCure Pharma |
| Kancera AB |
AlzeCure Pharma and Kancera AB Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with AlzeCure Pharma and Kancera AB
The main advantage of trading using opposite AlzeCure Pharma and Kancera AB positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AlzeCure Pharma position performs unexpectedly, Kancera 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 Kancera AB will offset losses from the drop in Kancera AB's long position.| AlzeCure Pharma vs. Kancera AB | AlzeCure Pharma vs. Cyxone AB | AlzeCure Pharma vs. Lidds AB | AlzeCure Pharma vs. Cantargia 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 Portfolio Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.
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