Correlation Between ChemoMetec and CBrain AS
Can any of the company-specific risk be diversified away by investing in both ChemoMetec and CBrain 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 ChemoMetec and CBrain AS into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ChemoMetec AS and cBrain AS, you can compare the effects of market volatilities on ChemoMetec and CBrain 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 ChemoMetec with a short position of CBrain AS. Check out your portfolio center. Please also check ongoing floating volatility patterns of ChemoMetec and CBrain AS.
Diversification Opportunities for ChemoMetec and CBrain AS
0.18 | Correlation Coefficient |
Average diversification
The 3 months correlation between ChemoMetec and CBrain is 0.18. Overlapping area represents the amount of risk that can be diversified away by holding ChemoMetec AS and cBrain AS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on cBrain AS and ChemoMetec 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 ChemoMetec AS are associated (or correlated) with CBrain AS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of cBrain AS has no effect on the direction of ChemoMetec i.e., ChemoMetec and CBrain AS go up and down completely randomly.
Pair Corralation between ChemoMetec and CBrain AS
Assuming the 90 days trading horizon ChemoMetec AS is expected to under-perform the CBrain AS. In addition to that, ChemoMetec is 1.29 times more volatile than cBrain AS. It trades about -0.01 of its total potential returns per unit of risk. cBrain AS is currently generating about 0.02 per unit of volatility. If you would invest 18,302 in cBrain AS on August 24, 2024 and sell it today you would earn a total of 1,998 from holding cBrain AS or generate 10.92% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
ChemoMetec AS vs. cBrain AS
Performance |
| Timeline |
| ChemoMetec AS |
| cBrain AS |
ChemoMetec and CBrain AS Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ChemoMetec and CBrain AS
The main advantage of trading using opposite ChemoMetec and CBrain AS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ChemoMetec position performs unexpectedly, CBrain 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 CBrain AS will offset losses from the drop in CBrain AS's long position.| ChemoMetec vs. cBrain AS | ChemoMetec vs. Ambu AS | ChemoMetec vs. Genmab AS | ChemoMetec vs. Zealand Pharma AS |
| 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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
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