Correlation Between Carasent ASA and Circa Group
Can any of the company-specific risk be diversified away by investing in both Carasent ASA and Circa 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 Carasent ASA and Circa Group into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Carasent ASA and Circa Group AS, you can compare the effects of market volatilities on Carasent ASA and Circa 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 Carasent ASA with a short position of Circa Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of Carasent ASA and Circa Group.
Diversification Opportunities for Carasent ASA and Circa Group
0.47 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Carasent and Circa is 0.47. Overlapping area represents the amount of risk that can be diversified away by holding Carasent ASA and Circa Group AS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Circa Group AS and Carasent ASA 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 Carasent ASA are associated (or correlated) with Circa Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Circa Group AS has no effect on the direction of Carasent ASA i.e., Carasent ASA and Circa Group go up and down completely randomly.
Pair Corralation between Carasent ASA and Circa Group
Assuming the 90 days trading horizon Carasent ASA is expected to generate 0.43 times more return on investment than Circa Group. However, Carasent ASA is 2.32 times less risky than Circa Group. It trades about 0.09 of its potential returns per unit of risk. Circa Group AS is currently generating about -0.04 per unit of risk. If you would invest 1,016 in Carasent ASA on September 3, 2024 and sell it today you would earn a total of 979.00 from holding Carasent ASA or generate 96.36% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Carasent ASA vs. Circa Group AS
Performance |
| Timeline |
| Carasent ASA |
| Circa Group AS |
Carasent ASA and Circa Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Carasent ASA and Circa Group
The main advantage of trading using opposite Carasent ASA and Circa Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Carasent ASA position performs unexpectedly, Circa 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 Circa Group will offset losses from the drop in Circa Group's long position.| Carasent ASA vs. Arcticzymes Technologies ASA | Carasent ASA vs. Smart Eye AB | Carasent ASA vs. Bergenbio ASA | Carasent ASA vs. Kitron ASA |
| Circa Group vs. Arcticzymes Technologies ASA | Circa Group vs. Napatech AS | Circa Group vs. Waste Plastic Upcycling | Circa Group vs. Nordic Mining ASA |
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 Portfolio Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
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