Correlation Between Carasent ASA and Hofseth Biocare
Can any of the company-specific risk be diversified away by investing in both Carasent ASA and Hofseth Biocare 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 Hofseth Biocare into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Carasent ASA and Hofseth Biocare ASA, you can compare the effects of market volatilities on Carasent ASA and Hofseth Biocare 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 Hofseth Biocare. Check out your portfolio center. Please also check ongoing floating volatility patterns of Carasent ASA and Hofseth Biocare.
Diversification Opportunities for Carasent ASA and Hofseth Biocare
-0.81 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Carasent and Hofseth is -0.81. Overlapping area represents the amount of risk that can be diversified away by holding Carasent ASA and Hofseth Biocare ASA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hofseth Biocare ASA 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 Hofseth Biocare. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hofseth Biocare ASA has no effect on the direction of Carasent ASA i.e., Carasent ASA and Hofseth Biocare go up and down completely randomly.
Pair Corralation between Carasent ASA and Hofseth Biocare
Assuming the 90 days trading horizon Carasent ASA is expected to generate 0.59 times more return on investment than Hofseth Biocare. However, Carasent ASA is 1.71 times less risky than Hofseth Biocare. It trades about -0.04 of its potential returns per unit of risk. Hofseth Biocare ASA is currently generating about -0.13 per unit of risk. If you would invest 2,000 in Carasent ASA on August 31, 2024 and sell it today you would lose (45.00) from holding Carasent ASA or give up 2.25% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 95.65% |
| Values | Daily Returns |
Carasent ASA vs. Hofseth Biocare ASA
Performance |
| Timeline |
| Carasent ASA |
| Hofseth Biocare ASA |
Carasent ASA and Hofseth Biocare Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Carasent ASA and Hofseth Biocare
The main advantage of trading using opposite Carasent ASA and Hofseth Biocare positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Carasent ASA position performs unexpectedly, Hofseth Biocare 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 Hofseth Biocare will offset losses from the drop in Hofseth Biocare'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 |
| Hofseth Biocare vs. Carasent ASA | Hofseth Biocare vs. Bergenbio ASA | Hofseth Biocare vs. Photocure | Hofseth Biocare vs. Kitron 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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.
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