Correlation Between CBrain AS and NKT AS
Can any of the company-specific risk be diversified away by investing in both CBrain AS and NKT AS 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 NKT AS into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between cBrain AS and NKT AS, you can compare the effects of market volatilities on CBrain AS and NKT AS 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 NKT AS. Check out your portfolio center. Please also check ongoing floating volatility patterns of CBrain AS and NKT AS.
Diversification Opportunities for CBrain AS and NKT AS
Good diversification
The 3 months correlation between CBrain and NKT is -0.16. Overlapping area represents the amount of risk that can be diversified away by holding cBrain AS and NKT AS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NKT 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 NKT AS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NKT AS has no effect on the direction of CBrain AS i.e., CBrain AS and NKT AS go up and down completely randomly.
Pair Corralation between CBrain AS and NKT AS
Assuming the 90 days trading horizon cBrain AS is expected to generate 1.39 times more return on investment than NKT AS. However, CBrain AS is 1.39 times more volatile than NKT AS. It trades about 0.01 of its potential returns per unit of risk. NKT AS is currently generating about -0.14 per unit of risk. If you would invest 20,150 in cBrain AS on August 29, 2024 and sell it today you would lose (150.00) from holding cBrain AS or give up 0.74% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
cBrain AS vs. NKT AS
Performance |
| Timeline |
| cBrain AS |
| NKT AS |
CBrain AS and NKT AS Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CBrain AS and NKT AS
The main advantage of trading using opposite CBrain AS and NKT AS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CBrain AS position performs unexpectedly, NKT AS 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 NKT AS will offset losses from the drop in NKT AS's long position.| CBrain AS vs. ChemoMetec AS | CBrain AS vs. Ambu AS | CBrain AS vs. Genmab AS | CBrain AS vs. Zealand Pharma AS |
| NKT AS vs. FLSmidth Co | NKT AS vs. GN Store Nord | NKT AS vs. DSV Panalpina AS | NKT AS vs. ROCKWOOL International 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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.
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