Correlation Between Alligator Bioscience and Cantargia
Can any of the company-specific risk be diversified away by investing in both Alligator Bioscience and Cantargia 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 Alligator Bioscience and Cantargia into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Alligator Bioscience AB and Cantargia AB, you can compare the effects of market volatilities on Alligator Bioscience and Cantargia 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 Alligator Bioscience with a short position of Cantargia. Check out your portfolio center. Please also check ongoing floating volatility patterns of Alligator Bioscience and Cantargia.
Diversification Opportunities for Alligator Bioscience and Cantargia
0.79 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Alligator and Cantargia is 0.79. Overlapping area represents the amount of risk that can be diversified away by holding Alligator Bioscience AB and Cantargia AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cantargia AB and Alligator Bioscience 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 Alligator Bioscience AB are associated (or correlated) with Cantargia. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cantargia AB has no effect on the direction of Alligator Bioscience i.e., Alligator Bioscience and Cantargia go up and down completely randomly.
Pair Corralation between Alligator Bioscience and Cantargia
Assuming the 90 days trading horizon Alligator Bioscience AB is expected to under-perform the Cantargia. But the stock apears to be less risky and, when comparing its historical volatility, Alligator Bioscience AB is 1.08 times less risky than Cantargia. The stock trades about -0.25 of its potential returns per unit of risk. The Cantargia AB is currently generating about -0.23 of returns per unit of risk over similar time horizon. If you would invest 295.00 in Cantargia AB on August 25, 2024 and sell it today you would lose (114.00) from holding Cantargia AB or give up 38.64% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Alligator Bioscience AB vs. Cantargia AB
Performance |
| Timeline |
| Alligator Bioscience |
| Cantargia AB |
Alligator Bioscience and Cantargia Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Alligator Bioscience and Cantargia
The main advantage of trading using opposite Alligator Bioscience and Cantargia positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Alligator Bioscience position performs unexpectedly, Cantargia 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 Cantargia will offset losses from the drop in Cantargia's long position.The idea behind Alligator Bioscience AB and Cantargia 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.| Cantargia vs. Hansa Biopharma AB | Cantargia vs. Oncopeptides AB | Cantargia vs. BioArctic AB | Cantargia vs. Alligator Bioscience 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 Center module to all portfolio management and optimization tools to improve performance of your portfolios.
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