Correlation Between CBrain AS and Nanoform Finland
Can any of the company-specific risk be diversified away by investing in both CBrain AS and Nanoform Finland 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 Nanoform Finland into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between cBrain AS and Nanoform Finland Plc, you can compare the effects of market volatilities on CBrain AS and Nanoform Finland 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 Nanoform Finland. Check out your portfolio center. Please also check ongoing floating volatility patterns of CBrain AS and Nanoform Finland.
Diversification Opportunities for CBrain AS and Nanoform Finland
0.33 | Correlation Coefficient |
Weak diversification
The 3 months correlation between CBrain and Nanoform is 0.33. Overlapping area represents the amount of risk that can be diversified away by holding cBrain AS and Nanoform Finland Plc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nanoform Finland Plc 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 Nanoform Finland. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nanoform Finland Plc has no effect on the direction of CBrain AS i.e., CBrain AS and Nanoform Finland go up and down completely randomly.
Pair Corralation between CBrain AS and Nanoform Finland
Assuming the 90 days trading horizon cBrain AS is expected to generate 0.8 times more return on investment than Nanoform Finland. However, cBrain AS is 1.25 times less risky than Nanoform Finland. It trades about 0.03 of its potential returns per unit of risk. Nanoform Finland Plc is currently generating about -0.03 per unit of risk. If you would invest 16,135 in cBrain AS on September 14, 2024 and sell it today you would earn a total of 3,915 from holding cBrain AS or generate 24.26% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 99.4% |
| Values | Daily Returns |
cBrain AS vs. Nanoform Finland Plc
Performance |
| Timeline |
| cBrain AS |
| Nanoform Finland Plc |
CBrain AS and Nanoform Finland Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CBrain AS and Nanoform Finland
The main advantage of trading using opposite CBrain AS and Nanoform Finland positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CBrain AS position performs unexpectedly, Nanoform Finland 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 Nanoform Finland will offset losses from the drop in Nanoform Finland's long position.| CBrain AS vs. ChemoMetec AS | CBrain AS vs. Ambu AS | CBrain AS vs. Genmab AS | CBrain AS vs. Zealand Pharma AS |
| Nanoform Finland vs. Bavarian Nordic | Nanoform Finland vs. BioPorto | Nanoform Finland vs. Zaptec AS | Nanoform Finland vs. cBrain 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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.
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