Correlation Between CBrain AS and Kreditbanken
Can any of the company-specific risk be diversified away by investing in both CBrain AS and Kreditbanken 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 Kreditbanken into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between cBrain AS and Kreditbanken AS, you can compare the effects of market volatilities on CBrain AS and Kreditbanken 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 Kreditbanken. Check out your portfolio center. Please also check ongoing floating volatility patterns of CBrain AS and Kreditbanken.
Diversification Opportunities for CBrain AS and Kreditbanken
-0.04 | Correlation Coefficient |
Good diversification
The 3 months correlation between CBrain and Kreditbanken is -0.04. Overlapping area represents the amount of risk that can be diversified away by holding cBrain AS and Kreditbanken AS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kreditbanken AS 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 Kreditbanken. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kreditbanken AS has no effect on the direction of CBrain AS i.e., CBrain AS and Kreditbanken go up and down completely randomly.
Pair Corralation between CBrain AS and Kreditbanken
Assuming the 90 days trading horizon cBrain AS is expected to generate 2.86 times more return on investment than Kreditbanken. However, CBrain AS is 2.86 times more volatile than Kreditbanken AS. It trades about 0.08 of its potential returns per unit of risk. Kreditbanken AS is currently generating about 0.01 per unit of risk. If you would invest 18,860 in cBrain AS on August 30, 2024 and sell it today you would earn a total of 1,060 from holding cBrain AS or generate 5.62% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
cBrain AS vs. Kreditbanken AS
Performance |
| Timeline |
| cBrain AS |
| Kreditbanken AS |
CBrain AS and Kreditbanken Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CBrain AS and Kreditbanken
The main advantage of trading using opposite CBrain AS and Kreditbanken positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CBrain AS position performs unexpectedly, Kreditbanken 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 Kreditbanken will offset losses from the drop in Kreditbanken's long position.| CBrain AS vs. ChemoMetec AS | CBrain AS vs. Ambu AS | CBrain AS vs. Genmab AS | CBrain AS vs. Zealand Pharma AS |
| Kreditbanken vs. Lollands Bank | Kreditbanken vs. Groenlandsbanken AS | Kreditbanken vs. Skjern Bank AS | Kreditbanken vs. Djurslands Bank |
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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.
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