Correlation Between CBrain AS and Genovis AB
Can any of the company-specific risk be diversified away by investing in both CBrain AS and Genovis AB 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 Genovis AB into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between cBrain AS and Genovis AB, you can compare the effects of market volatilities on CBrain AS and Genovis AB 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 Genovis AB. Check out your portfolio center. Please also check ongoing floating volatility patterns of CBrain AS and Genovis AB.
Diversification Opportunities for CBrain AS and Genovis AB
0.5 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between CBrain and Genovis is 0.5. Overlapping area represents the amount of risk that can be diversified away by holding cBrain AS and Genovis AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Genovis AB 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 Genovis AB. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Genovis AB has no effect on the direction of CBrain AS i.e., CBrain AS and Genovis AB go up and down completely randomly.
Pair Corralation between CBrain AS and Genovis AB
Assuming the 90 days trading horizon CBrain AS is expected to generate 2.34 times less return on investment than Genovis AB. But when comparing it to its historical volatility, cBrain AS is 1.76 times less risky than Genovis AB. It trades about 0.08 of its potential returns per unit of risk. Genovis AB is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest 2,245 in Genovis AB on August 30, 2024 and sell it today you would earn a total of 290.00 from holding Genovis AB or generate 12.92% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
cBrain AS vs. Genovis AB
Performance |
| Timeline |
| cBrain AS |
| Genovis AB |
CBrain AS and Genovis AB Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CBrain AS and Genovis AB
The main advantage of trading using opposite CBrain AS and Genovis AB positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CBrain AS position performs unexpectedly, Genovis AB 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 Genovis AB will offset losses from the drop in Genovis AB's long position.| CBrain AS vs. ChemoMetec AS | CBrain AS vs. Ambu AS | CBrain AS vs. Genmab AS | CBrain AS vs. Zealand Pharma AS |
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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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.
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