Correlation Between CBrain AS and Lipum AB
Can any of the company-specific risk be diversified away by investing in both CBrain AS and Lipum 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 Lipum 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 Lipum AB, you can compare the effects of market volatilities on CBrain AS and Lipum 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 Lipum AB. Check out your portfolio center. Please also check ongoing floating volatility patterns of CBrain AS and Lipum AB.
Diversification Opportunities for CBrain AS and Lipum AB
Very weak diversification
The 3 months correlation between CBrain and Lipum is 0.47. Overlapping area represents the amount of risk that can be diversified away by holding cBrain AS and Lipum AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lipum 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 Lipum AB. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lipum AB has no effect on the direction of CBrain AS i.e., CBrain AS and Lipum AB go up and down completely randomly.
Pair Corralation between CBrain AS and Lipum AB
Assuming the 90 days trading horizon CBrain AS is expected to generate 3.3 times less return on investment than Lipum AB. In addition to that, CBrain AS is 1.15 times more volatile than Lipum AB. It trades about 0.05 of its total potential returns per unit of risk. Lipum AB is currently generating about 0.19 per unit of volatility. If you would invest 1,360 in Lipum AB on November 7, 2024 and sell it today you would earn a total of 140.00 from holding Lipum AB or generate 10.29% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 95.65% |
| Values | Daily Returns |
cBrain AS vs. Lipum AB
Performance |
| Timeline |
| cBrain AS |
| Lipum AB |
CBrain AS and Lipum AB Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CBrain AS and Lipum AB
The main advantage of trading using opposite CBrain AS and Lipum AB positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CBrain AS position performs unexpectedly, Lipum 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 Lipum AB will offset losses from the drop in Lipum 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 |
| Lipum AB vs. Ascelia Pharma AB | Lipum AB vs. NextCell Pharma AB | Lipum AB vs. Annexin Pharmaceuticals AB | Lipum AB vs. AlzeCure Pharma |
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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