Correlation Between CBrain AS and Penneo AS
Can any of the company-specific risk be diversified away by investing in both CBrain AS and Penneo 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 Penneo 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 Penneo AS, you can compare the effects of market volatilities on CBrain AS and Penneo 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 Penneo AS. Check out your portfolio center. Please also check ongoing floating volatility patterns of CBrain AS and Penneo AS.
Diversification Opportunities for CBrain AS and Penneo AS
Significant diversification
The 3 months correlation between CBrain and Penneo is 0.06. Overlapping area represents the amount of risk that can be diversified away by holding cBrain AS and Penneo AS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Penneo 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 Penneo AS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Penneo AS has no effect on the direction of CBrain AS i.e., CBrain AS and Penneo AS go up and down completely randomly.
Pair Corralation between CBrain AS and Penneo AS
Assuming the 90 days trading horizon cBrain AS is expected to generate 1.75 times more return on investment than Penneo AS. However, CBrain AS is 1.75 times more volatile than Penneo AS. It trades about 0.07 of its potential returns per unit of risk. Penneo AS is currently generating about -0.04 per unit of risk. If you would invest 19,120 in cBrain AS on August 29, 2024 and sell it today you would earn a total of 880.00 from holding cBrain AS or generate 4.6% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
cBrain AS vs. Penneo AS
Performance |
| Timeline |
| cBrain AS |
| Penneo AS |
CBrain AS and Penneo AS Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CBrain AS and Penneo AS
The main advantage of trading using opposite CBrain AS and Penneo AS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CBrain AS position performs unexpectedly, Penneo 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 Penneo AS will offset losses from the drop in Penneo 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 |
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 Portfolio Center module to all portfolio management and optimization tools to improve performance of your portfolios.
Other Complementary Tools
| Premium Stories Follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope | |
| Risk-Return Analysis View associations between returns expected from investment and the risk you assume | |
| CEOs Directory Screen CEOs from public companies around the world | |
| Bonds Directory Find actively traded corporate debentures issued by US companies | |
| Commodity Directory Find actively traded commodities issued by global exchanges |