Correlation Between CBrain AS and Rovsing AS
Can any of the company-specific risk be diversified away by investing in both CBrain AS and Rovsing 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 Rovsing 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 Rovsing AS, you can compare the effects of market volatilities on CBrain AS and Rovsing 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 Rovsing AS. Check out your portfolio center. Please also check ongoing floating volatility patterns of CBrain AS and Rovsing AS.
Diversification Opportunities for CBrain AS and Rovsing AS
0.09 | Correlation Coefficient |
Significant diversification
The 3 months correlation between CBrain and Rovsing is 0.09. Overlapping area represents the amount of risk that can be diversified away by holding cBrain AS and Rovsing AS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Rovsing 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 Rovsing AS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Rovsing AS has no effect on the direction of CBrain AS i.e., CBrain AS and Rovsing AS go up and down completely randomly.
Pair Corralation between CBrain AS and Rovsing AS
Assuming the 90 days trading horizon cBrain AS is expected to generate 1.3 times more return on investment than Rovsing AS. However, CBrain AS is 1.3 times more volatile than Rovsing AS. It trades about 0.08 of its potential returns per unit of risk. Rovsing AS is currently generating about -0.09 per unit of risk. If you would invest 18,580 in cBrain AS on October 26, 2024 and sell it today you would earn a total of 700.00 from holding cBrain AS or generate 3.77% 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. Rovsing AS
Performance |
| Timeline |
| cBrain AS |
| Rovsing AS |
CBrain AS and Rovsing AS Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CBrain AS and Rovsing AS
The main advantage of trading using opposite CBrain AS and Rovsing AS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CBrain AS position performs unexpectedly, Rovsing 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 Rovsing AS will offset losses from the drop in Rovsing 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 |
| Rovsing AS vs. BioPorto | Rovsing AS vs. cBrain AS | Rovsing AS vs. North Media AS | Rovsing 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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