Correlation Between Cantargia and MilDef Group
Can any of the company-specific risk be diversified away by investing in both Cantargia and MilDef Group 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 MilDef Group into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Cantargia AB and MilDef Group AB, you can compare the effects of market volatilities on Cantargia and MilDef Group 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 MilDef Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cantargia and MilDef Group.
Diversification Opportunities for Cantargia and MilDef Group
-0.3 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Cantargia and MilDef is -0.3. Overlapping area represents the amount of risk that can be diversified away by holding Cantargia AB and MilDef Group AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MilDef Group 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 MilDef Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MilDef Group AB has no effect on the direction of Cantargia i.e., Cantargia and MilDef Group go up and down completely randomly.
Pair Corralation between Cantargia and MilDef Group
Assuming the 90 days trading horizon Cantargia AB is expected to under-perform the MilDef Group. In addition to that, Cantargia is 1.63 times more volatile than MilDef Group AB. It trades about -0.01 of its total potential returns per unit of risk. MilDef Group AB is currently generating about 0.05 per unit of volatility. If you would invest 7,039 in MilDef Group AB on November 8, 2024 and sell it today you would earn a total of 5,701 from holding MilDef Group AB or generate 80.99% 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. MilDef Group AB
Performance |
| Timeline |
| Cantargia AB |
| MilDef Group AB |
Cantargia and MilDef Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cantargia and MilDef Group
The main advantage of trading using opposite Cantargia and MilDef Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cantargia position performs unexpectedly, MilDef Group 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 MilDef Group will offset losses from the drop in MilDef Group's long position.The idea behind Cantargia AB and MilDef Group AB 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.| MilDef Group vs. eEducation Albert AB | MilDef Group vs. Investment AB Oresund | MilDef Group vs. Diamyd Medical AB | MilDef Group vs. JLT Mobile Computers |
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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.
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