Correlation Between Cantargia and Clinical Laserthermia
Can any of the company-specific risk be diversified away by investing in both Cantargia and Clinical Laserthermia 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 Cantargia and Clinical Laserthermia into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Cantargia AB and Clinical Laserthermia Systems, you can compare the effects of market volatilities on Cantargia and Clinical Laserthermia 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 Cantargia with a short position of Clinical Laserthermia. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cantargia and Clinical Laserthermia.
Diversification Opportunities for Cantargia and Clinical Laserthermia
0.81 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Cantargia and Clinical is 0.81. Overlapping area represents the amount of risk that can be diversified away by holding Cantargia AB and Clinical Laserthermia Systems in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Clinical Laserthermia and Cantargia 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 Cantargia AB are associated (or correlated) with Clinical Laserthermia. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Clinical Laserthermia has no effect on the direction of Cantargia i.e., Cantargia and Clinical Laserthermia go up and down completely randomly.
Pair Corralation between Cantargia and Clinical Laserthermia
Assuming the 90 days trading horizon Cantargia is expected to generate 2.12 times less return on investment than Clinical Laserthermia. But when comparing it to its historical volatility, Cantargia AB is 2.06 times less risky than Clinical Laserthermia. It trades about 0.12 of its potential returns per unit of risk. Clinical Laserthermia Systems is currently generating about 0.13 of returns per unit of risk over similar time horizon. If you would invest 360.00 in Clinical Laserthermia Systems on November 7, 2024 and sell it today you would earn a total of 38.00 from holding Clinical Laserthermia Systems or generate 10.56% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 90.91% |
| Values | Daily Returns |
Cantargia AB vs. Clinical Laserthermia Systems
Performance |
| Timeline |
| Cantargia AB |
| Clinical Laserthermia |
Cantargia and Clinical Laserthermia Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cantargia and Clinical Laserthermia
The main advantage of trading using opposite Cantargia and Clinical Laserthermia positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cantargia position performs unexpectedly, Clinical Laserthermia 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 Clinical Laserthermia will offset losses from the drop in Clinical Laserthermia's long position.The idea behind Cantargia AB and Clinical Laserthermia Systems 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.| Clinical Laserthermia vs. Cantargia AB | Clinical Laserthermia vs. Episurf Medical AB | Clinical Laserthermia vs. Karolinska Development AB | Clinical Laserthermia vs. Acarix AS |
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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
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