Correlation Between Cantargia and Newbury Pharmaceuticals
Can any of the company-specific risk be diversified away by investing in both Cantargia and Newbury Pharmaceuticals 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 Newbury Pharmaceuticals into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Cantargia AB and Newbury Pharmaceuticals AB, you can compare the effects of market volatilities on Cantargia and Newbury Pharmaceuticals 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 Newbury Pharmaceuticals. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cantargia and Newbury Pharmaceuticals.
Diversification Opportunities for Cantargia and Newbury Pharmaceuticals
-0.44 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Cantargia and Newbury is -0.44. Overlapping area represents the amount of risk that can be diversified away by holding Cantargia AB and Newbury Pharmaceuticals AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Newbury Pharmaceuticals 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 Newbury Pharmaceuticals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Newbury Pharmaceuticals has no effect on the direction of Cantargia i.e., Cantargia and Newbury Pharmaceuticals go up and down completely randomly.
Pair Corralation between Cantargia and Newbury Pharmaceuticals
Assuming the 90 days trading horizon Cantargia AB is expected to under-perform the Newbury Pharmaceuticals. In addition to that, Cantargia is 1.37 times more volatile than Newbury Pharmaceuticals AB. It trades about -0.13 of its total potential returns per unit of risk. Newbury Pharmaceuticals AB is currently generating about 0.05 per unit of volatility. If you would invest 294.00 in Newbury Pharmaceuticals AB on September 3, 2024 and sell it today you would earn a total of 50.00 from holding Newbury Pharmaceuticals AB or generate 17.01% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Cantargia AB vs. Newbury Pharmaceuticals AB
Performance |
| Timeline |
| Cantargia AB |
| Newbury Pharmaceuticals |
Cantargia and Newbury Pharmaceuticals Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cantargia and Newbury Pharmaceuticals
The main advantage of trading using opposite Cantargia and Newbury Pharmaceuticals positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cantargia position performs unexpectedly, Newbury Pharmaceuticals 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 Newbury Pharmaceuticals will offset losses from the drop in Newbury Pharmaceuticals' long position.| Cantargia vs. Hansa Biopharma AB | Cantargia vs. Oncopeptides AB | Cantargia vs. BioArctic AB | Cantargia vs. Alligator Bioscience AB |
| Newbury Pharmaceuticals vs. Sprint Bioscience AB | Newbury Pharmaceuticals vs. Corline Biomedical AB | Newbury Pharmaceuticals vs. Cantargia AB | Newbury Pharmaceuticals vs. Lidds 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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.
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