Correlation Between CellaVision and Careium AB
Can any of the company-specific risk be diversified away by investing in both CellaVision and Careium AB 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 CellaVision and Careium AB into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between CellaVision AB and Careium AB, you can compare the effects of market volatilities on CellaVision and Careium AB 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 CellaVision with a short position of Careium AB. Check out your portfolio center. Please also check ongoing floating volatility patterns of CellaVision and Careium AB.
Diversification Opportunities for CellaVision and Careium AB
0.58 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between CellaVision and Careium is 0.58. Overlapping area represents the amount of risk that can be diversified away by holding CellaVision AB and Careium AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Careium AB and CellaVision 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 CellaVision AB are associated (or correlated) with Careium AB. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Careium AB has no effect on the direction of CellaVision i.e., CellaVision and Careium AB go up and down completely randomly.
Pair Corralation between CellaVision and Careium AB
Assuming the 90 days trading horizon CellaVision AB is expected to under-perform the Careium AB. In addition to that, CellaVision is 1.69 times more volatile than Careium AB. It trades about -0.13 of its total potential returns per unit of risk. Careium AB is currently generating about -0.09 per unit of volatility. If you would invest 3,040 in Careium AB on September 13, 2024 and sell it today you would lose (90.00) from holding Careium AB or give up 2.96% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 95.65% |
| Values | Daily Returns |
CellaVision AB vs. Careium AB
Performance |
| Timeline |
| CellaVision AB |
| Careium AB |
CellaVision and Careium AB Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CellaVision and Careium AB
The main advantage of trading using opposite CellaVision and Careium AB positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CellaVision position performs unexpectedly, Careium AB 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 Careium AB will offset losses from the drop in Careium AB's long position.| CellaVision vs. Mendus AB | CellaVision vs. Cantargia AB | CellaVision vs. BioInvent International AB | CellaVision vs. Isofol Medical AB |
| Careium AB vs. Humble Group AB | Careium AB vs. Enad Global 7 | Careium AB vs. Goodbye Kansas Group | Careium AB vs. KABE Group AB |
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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.
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