Correlation Between CAG Group and CodeMill
Can any of the company-specific risk be diversified away by investing in both CAG Group and CodeMill 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 CAG Group and CodeMill into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between CAG Group AB and CodeMill AB, you can compare the effects of market volatilities on CAG Group and CodeMill 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 CAG Group with a short position of CodeMill. Check out your portfolio center. Please also check ongoing floating volatility patterns of CAG Group and CodeMill.
Diversification Opportunities for CAG Group and CodeMill
Very good diversification
The 3 months correlation between CAG and CodeMill is -0.34. Overlapping area represents the amount of risk that can be diversified away by holding CAG Group AB and CodeMill AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CodeMill AB and CAG 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 CAG Group AB are associated (or correlated) with CodeMill. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CodeMill AB has no effect on the direction of CAG Group i.e., CAG Group and CodeMill go up and down completely randomly.
Pair Corralation between CAG Group and CodeMill
Assuming the 90 days trading horizon CAG Group AB is expected to generate 0.27 times more return on investment than CodeMill. However, CAG Group AB is 3.76 times less risky than CodeMill. It trades about 0.07 of its potential returns per unit of risk. CodeMill AB is currently generating about -0.12 per unit of risk. If you would invest 10,800 in CAG Group AB on August 28, 2024 and sell it today you would earn a total of 300.00 from holding CAG Group AB or generate 2.78% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
CAG Group AB vs. CodeMill AB
Performance |
| Timeline |
| CAG Group AB |
| CodeMill AB |
CAG Group and CodeMill Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CAG Group and CodeMill
The main advantage of trading using opposite CAG Group and CodeMill positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CAG Group position performs unexpectedly, CodeMill 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 CodeMill will offset losses from the drop in CodeMill's long position.The idea behind CAG Group AB and CodeMill 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.| CodeMill vs. CAG Group AB | CodeMill vs. Checkin Group AB | CodeMill vs. Exsitec Holding AB | CodeMill vs. Divio Technologies 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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.
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