Correlation Between CBrain AS and Orphazyme
Can any of the company-specific risk be diversified away by investing in both CBrain AS and Orphazyme 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 Orphazyme into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between cBrain AS and Orphazyme AS, you can compare the effects of market volatilities on CBrain AS and Orphazyme 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 Orphazyme. Check out your portfolio center. Please also check ongoing floating volatility patterns of CBrain AS and Orphazyme.
Diversification Opportunities for CBrain AS and Orphazyme
Modest diversification
The 3 months correlation between CBrain and Orphazyme is 0.21. Overlapping area represents the amount of risk that can be diversified away by holding cBrain AS and Orphazyme AS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Orphazyme 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 Orphazyme. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Orphazyme AS has no effect on the direction of CBrain AS i.e., CBrain AS and Orphazyme go up and down completely randomly.
Pair Corralation between CBrain AS and Orphazyme
Assuming the 90 days trading horizon CBrain AS is expected to generate 1.25 times less return on investment than Orphazyme. But when comparing it to its historical volatility, cBrain AS is 1.52 times less risky than Orphazyme. It trades about 0.03 of its potential returns per unit of risk. Orphazyme AS is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 90,000 in Orphazyme AS on August 28, 2024 and sell it today you would earn a total of 1,500 from holding Orphazyme AS or generate 1.67% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 98.46% |
| Values | Daily Returns |
cBrain AS vs. Orphazyme AS
Performance |
| Timeline |
| cBrain AS |
| Orphazyme AS |
CBrain AS and Orphazyme Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CBrain AS and Orphazyme
The main advantage of trading using opposite CBrain AS and Orphazyme positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CBrain AS position performs unexpectedly, Orphazyme 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 Orphazyme will offset losses from the drop in Orphazyme's long position.| CBrain AS vs. ChemoMetec AS | CBrain AS vs. Ambu AS | CBrain AS vs. Genmab AS | CBrain AS vs. Zealand Pharma 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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.
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