Correlation Between Castellum and Intrum Justitia
Can any of the company-specific risk be diversified away by investing in both Castellum and Intrum Justitia 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 Castellum and Intrum Justitia into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Castellum AB and Intrum Justitia AB, you can compare the effects of market volatilities on Castellum and Intrum Justitia 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 Castellum with a short position of Intrum Justitia. Check out your portfolio center. Please also check ongoing floating volatility patterns of Castellum and Intrum Justitia.
Diversification Opportunities for Castellum and Intrum Justitia
0.92 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Castellum and Intrum is 0.92. Overlapping area represents the amount of risk that can be diversified away by holding Castellum AB and Intrum Justitia AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Intrum Justitia AB and Castellum 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 Castellum AB are associated (or correlated) with Intrum Justitia. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Intrum Justitia AB has no effect on the direction of Castellum i.e., Castellum and Intrum Justitia go up and down completely randomly.
Pair Corralation between Castellum and Intrum Justitia
Assuming the 90 days trading horizon Castellum AB is expected to generate 0.27 times more return on investment than Intrum Justitia. However, Castellum AB is 3.66 times less risky than Intrum Justitia. It trades about -0.3 of its potential returns per unit of risk. Intrum Justitia AB is currently generating about -0.2 per unit of risk. If you would invest 13,910 in Castellum AB on August 28, 2024 and sell it today you would lose (1,330) from holding Castellum AB or give up 9.56% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 95.45% |
| Values | Daily Returns |
Castellum AB vs. Intrum Justitia AB
Performance |
| Timeline |
| Castellum AB |
| Intrum Justitia AB |
Castellum and Intrum Justitia Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Castellum and Intrum Justitia
The main advantage of trading using opposite Castellum and Intrum Justitia positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Castellum position performs unexpectedly, Intrum Justitia 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 Intrum Justitia will offset losses from the drop in Intrum Justitia's long position.The idea behind Castellum AB and Intrum Justitia 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.| Intrum Justitia vs. Addtech AB | Intrum Justitia vs. Teqnion AB | Intrum Justitia vs. Vitec Software Group | Intrum Justitia vs. Lagercrantz Group 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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
Other Complementary Tools
| Financial Widgets Easily integrated Macroaxis content with over 30 different plug-and-play financial widgets | |
| Share Portfolio Track or share privately all of your investments from the convenience of any device | |
| Portfolio Backtesting Avoid under-diversification and over-optimization by backtesting your portfolios | |
| Portfolio Volatility Check portfolio volatility and analyze historical return density to properly model market risk | |
| Crypto Correlations Use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins |