Correlation Between Cantargia and Gapwaves
Can any of the company-specific risk be diversified away by investing in both Cantargia and Gapwaves 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 Gapwaves into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Cantargia AB and Gapwaves AB Series, you can compare the effects of market volatilities on Cantargia and Gapwaves 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 Gapwaves. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cantargia and Gapwaves.
Diversification Opportunities for Cantargia and Gapwaves
Good diversification
The 3 months correlation between Cantargia and Gapwaves is -0.06. Overlapping area represents the amount of risk that can be diversified away by holding Cantargia AB and Gapwaves AB Series in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gapwaves AB Series 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 Gapwaves. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Gapwaves AB Series has no effect on the direction of Cantargia i.e., Cantargia and Gapwaves go up and down completely randomly.
Pair Corralation between Cantargia and Gapwaves
Assuming the 90 days trading horizon Cantargia AB is expected to under-perform the Gapwaves. In addition to that, Cantargia is 2.93 times more volatile than Gapwaves AB Series. It trades about -0.23 of its total potential returns per unit of risk. Gapwaves AB Series is currently generating about 0.05 per unit of volatility. If you would invest 1,792 in Gapwaves AB Series on August 24, 2024 and sell it today you would earn a total of 38.00 from holding Gapwaves AB Series or generate 2.12% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Cantargia AB vs. Gapwaves AB Series
Performance |
| Timeline |
| Cantargia AB |
| Gapwaves AB Series |
Cantargia and Gapwaves Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cantargia and Gapwaves
The main advantage of trading using opposite Cantargia and Gapwaves positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cantargia position performs unexpectedly, Gapwaves 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 Gapwaves will offset losses from the drop in Gapwaves' long position.The idea behind Cantargia AB and Gapwaves AB Series 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.| Gapwaves vs. Sivers IMA Holding | Gapwaves vs. SaltX Technology Holding | Gapwaves vs. Acconeer AB | Gapwaves vs. Fingerprint Cards 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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.
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