Correlation Between CBrain AS and Alm Brand
Can any of the company-specific risk be diversified away by investing in both CBrain AS and Alm Brand 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 CBrain AS and Alm Brand into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between cBrain AS and Alm Brand, you can compare the effects of market volatilities on CBrain AS and Alm Brand 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 CBrain AS with a short position of Alm Brand. Check out your portfolio center. Please also check ongoing floating volatility patterns of CBrain AS and Alm Brand.
Diversification Opportunities for CBrain AS and Alm Brand
Pay attention - limited upside
The 3 months correlation between CBrain and Alm is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding cBrain AS and Alm Brand in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Alm Brand and CBrain AS 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 cBrain AS are associated (or correlated) with Alm Brand. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Alm Brand has no effect on the direction of CBrain AS i.e., CBrain AS and Alm Brand go up and down completely randomly.
Pair Corralation between CBrain AS and Alm Brand
Assuming the 90 days trading horizon cBrain AS is expected to generate 3.57 times more return on investment than Alm Brand. However, CBrain AS is 3.57 times more volatile than Alm Brand. It trades about 0.02 of its potential returns per unit of risk. Alm Brand is currently generating about 0.04 per unit of risk. If you would invest 20,300 in cBrain AS on August 25, 2024 and sell it today you would earn a total of 0.00 from holding cBrain AS or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 95.65% |
| Values | Daily Returns |
cBrain AS vs. Alm Brand
Performance |
| Timeline |
| cBrain AS |
| Alm Brand |
CBrain AS and Alm Brand Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CBrain AS and Alm Brand
The main advantage of trading using opposite CBrain AS and Alm Brand positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CBrain AS position performs unexpectedly, Alm Brand 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 Alm Brand will offset losses from the drop in Alm Brand's long position.| CBrain AS vs. ChemoMetec AS | CBrain AS vs. Ambu AS | CBrain AS vs. Genmab AS | CBrain AS vs. Zealand Pharma AS |
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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.
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