Correlation Between Cantargia and Cyxone AB
Can any of the company-specific risk be diversified away by investing in both Cantargia and Cyxone 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 Cantargia and Cyxone AB into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Cantargia AB and Cyxone AB, you can compare the effects of market volatilities on Cantargia and Cyxone 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 Cantargia with a short position of Cyxone AB. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cantargia and Cyxone AB.
Diversification Opportunities for Cantargia and Cyxone AB
Poor diversification
The 3 months correlation between Cantargia and Cyxone is 0.76. Overlapping area represents the amount of risk that can be diversified away by holding Cantargia AB and Cyxone AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cyxone AB 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 Cyxone AB. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cyxone AB has no effect on the direction of Cantargia i.e., Cantargia and Cyxone AB go up and down completely randomly.
Pair Corralation between Cantargia and Cyxone AB
Assuming the 90 days trading horizon Cantargia AB is expected to under-perform the Cyxone AB. But the stock apears to be less risky and, when comparing its historical volatility, Cantargia AB is 2.98 times less risky than Cyxone AB. The stock trades about -0.26 of its potential returns per unit of risk. The Cyxone AB is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 3.30 in Cyxone AB on September 1, 2024 and sell it today you would lose (0.50) from holding Cyxone AB or give up 15.15% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 95.65% |
| Values | Daily Returns |
Cantargia AB vs. Cyxone AB
Performance |
| Timeline |
| Cantargia AB |
| Cyxone AB |
Cantargia and Cyxone AB Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cantargia and Cyxone AB
The main advantage of trading using opposite Cantargia and Cyxone AB positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cantargia position performs unexpectedly, Cyxone 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 Cyxone AB will offset losses from the drop in Cyxone AB's long position.| 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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
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