Correlation Between Cessatech and Strategic Investments
Can any of the company-specific risk be diversified away by investing in both Cessatech and Strategic Investments 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 Cessatech and Strategic Investments into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Cessatech AS and Strategic Investments AS, you can compare the effects of market volatilities on Cessatech and Strategic Investments 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 Cessatech with a short position of Strategic Investments. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cessatech and Strategic Investments.
Diversification Opportunities for Cessatech and Strategic Investments
0.26 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Cessatech and Strategic is 0.26. Overlapping area represents the amount of risk that can be diversified away by holding Cessatech AS and Strategic Investments AS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Strategic Investments and Cessatech 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 Cessatech AS are associated (or correlated) with Strategic Investments. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Strategic Investments has no effect on the direction of Cessatech i.e., Cessatech and Strategic Investments go up and down completely randomly.
Pair Corralation between Cessatech and Strategic Investments
Assuming the 90 days trading horizon Cessatech AS is expected to under-perform the Strategic Investments. In addition to that, Cessatech is 1.95 times more volatile than Strategic Investments AS. It trades about -0.04 of its total potential returns per unit of risk. Strategic Investments AS is currently generating about -0.01 per unit of volatility. If you would invest 126.00 in Strategic Investments AS on September 1, 2024 and sell it today you would lose (18.00) from holding Strategic Investments AS or give up 14.29% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 7.78% |
| Values | Daily Returns |
Cessatech AS vs. Strategic Investments AS
Performance |
| Timeline |
| Cessatech AS |
| Strategic Investments |
Cessatech and Strategic Investments Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cessatech and Strategic Investments
The main advantage of trading using opposite Cessatech and Strategic Investments positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cessatech position performs unexpectedly, Strategic Investments 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 Strategic Investments will offset losses from the drop in Strategic Investments' long position.| Cessatech vs. Novo Nordisk AS | Cessatech vs. Nordea Bank Abp | Cessatech vs. DSV Panalpina AS | Cessatech vs. AP Mller |
| Strategic Investments vs. Newcap Holding AS | Strategic Investments vs. SKAKO AS | Strategic Investments vs. Rovsing AS | Strategic Investments vs. Danske Invest |
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 Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.
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