Correlation Between Cantargia and Litium AB
Can any of the company-specific risk be diversified away by investing in both Cantargia and Litium 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 Litium 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 Litium AB, you can compare the effects of market volatilities on Cantargia and Litium 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 Litium AB. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cantargia and Litium AB.
Diversification Opportunities for Cantargia and Litium AB
Poor diversification
The 3 months correlation between Cantargia and Litium is 0.72. Overlapping area represents the amount of risk that can be diversified away by holding Cantargia AB and Litium AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Litium 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 Litium AB. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Litium AB has no effect on the direction of Cantargia i.e., Cantargia and Litium AB go up and down completely randomly.
Pair Corralation between Cantargia and Litium AB
Assuming the 90 days trading horizon Cantargia AB is expected to under-perform the Litium AB. In addition to that, Cantargia is 3.49 times more volatile than Litium AB. It trades about -0.26 of its total potential returns per unit of risk. Litium AB is currently generating about -0.01 per unit of volatility. If you would invest 798.00 in Litium AB on September 1, 2024 and sell it today you would lose (10.00) from holding Litium AB or give up 1.25% 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. Litium AB
Performance |
| Timeline |
| Cantargia AB |
| Litium AB |
Cantargia and Litium AB Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cantargia and Litium AB
The main advantage of trading using opposite Cantargia and Litium AB positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cantargia position performs unexpectedly, Litium 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 Litium AB will offset losses from the drop in Litium AB's long position.| Cantargia vs. Hansa Biopharma AB | Cantargia vs. Oncopeptides AB | Cantargia vs. BioArctic AB | Cantargia vs. Alligator Bioscience AB |
| Litium AB vs. Avensia publ AB | Litium AB vs. Micro Systemation AB | Litium AB vs. Generic Sweden publ | Litium AB vs. FormPipe Software 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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..
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