Correlation Between CAG Group and Precio Fishbone
Can any of the company-specific risk be diversified away by investing in both CAG Group and Precio Fishbone 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 Precio Fishbone 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 Precio Fishbone AB, you can compare the effects of market volatilities on CAG Group and Precio Fishbone 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 Precio Fishbone. Check out your portfolio center. Please also check ongoing floating volatility patterns of CAG Group and Precio Fishbone.
Diversification Opportunities for CAG Group and Precio Fishbone
0.22 | Correlation Coefficient |
Modest diversification
The 3 months correlation between CAG and Precio is 0.22. Overlapping area represents the amount of risk that can be diversified away by holding CAG Group AB and Precio Fishbone AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Precio Fishbone 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 Precio Fishbone. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Precio Fishbone AB has no effect on the direction of CAG Group i.e., CAG Group and Precio Fishbone go up and down completely randomly.
Pair Corralation between CAG Group and Precio Fishbone
Assuming the 90 days trading horizon CAG Group AB is expected to under-perform the Precio Fishbone. But the stock apears to be less risky and, when comparing its historical volatility, CAG Group AB is 2.15 times less risky than Precio Fishbone. The stock trades about -0.01 of its potential returns per unit of risk. The Precio Fishbone AB is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest 2,220 in Precio Fishbone AB on November 29, 2024 and sell it today you would earn a total of 120.00 from holding Precio Fishbone AB or generate 5.41% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
CAG Group AB vs. Precio Fishbone AB
Performance |
| Timeline |
| CAG Group AB |
| Precio Fishbone AB |
CAG Group and Precio Fishbone Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CAG Group and Precio Fishbone
The main advantage of trading using opposite CAG Group and Precio Fishbone positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CAG Group position performs unexpectedly, Precio Fishbone 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 Precio Fishbone will offset losses from the drop in Precio Fishbone's long position.| CAG Group vs. Avensia publ AB | CAG Group vs. DevPort AB | CAG Group vs. B3 Consulting Group | CAG Group vs. Micro Systemation AB |
| Precio Fishbone vs. Avensia publ AB | Precio Fishbone vs. Generic Sweden publ | Precio Fishbone vs. Novotek AB | Precio Fishbone vs. DevPort 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 Bonds Directory module to find actively traded corporate debentures issued by US companies.
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