Correlation Between Cell Impact and Alcadon Group
Can any of the company-specific risk be diversified away by investing in both Cell Impact and Alcadon Group 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 Cell Impact and Alcadon Group into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Cell Impact AB and Alcadon Group AB, you can compare the effects of market volatilities on Cell Impact and Alcadon Group 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 Cell Impact with a short position of Alcadon Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cell Impact and Alcadon Group.
Diversification Opportunities for Cell Impact and Alcadon Group
0.71 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Cell and Alcadon is 0.71. Overlapping area represents the amount of risk that can be diversified away by holding Cell Impact AB and Alcadon Group AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Alcadon Group AB and Cell Impact 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 Cell Impact AB are associated (or correlated) with Alcadon Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Alcadon Group AB has no effect on the direction of Cell Impact i.e., Cell Impact and Alcadon Group go up and down completely randomly.
Pair Corralation between Cell Impact and Alcadon Group
Assuming the 90 days horizon Cell Impact AB is expected to under-perform the Alcadon Group. In addition to that, Cell Impact is 4.12 times more volatile than Alcadon Group AB. It trades about -0.03 of its total potential returns per unit of risk. Alcadon Group AB is currently generating about -0.06 per unit of volatility. If you would invest 7,170 in Alcadon Group AB on August 27, 2024 and sell it today you would lose (4,330) from holding Alcadon Group AB or give up 60.39% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Cell Impact AB vs. Alcadon Group AB
Performance |
| Timeline |
| Cell Impact AB |
| Alcadon Group AB |
Cell Impact and Alcadon Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cell Impact and Alcadon Group
The main advantage of trading using opposite Cell Impact and Alcadon Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cell Impact position performs unexpectedly, Alcadon Group 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 Alcadon Group will offset losses from the drop in Alcadon Group's long position.| Cell Impact vs. Impact Coatings publ | Cell Impact vs. Powercell Sweden | Cell Impact vs. Oncopeptides AB | Cell Impact vs. SaltX Technology Holding |
| Alcadon Group vs. DistIT AB | Alcadon Group vs. Addnode Group AB | Alcadon Group vs. Awardit AB | Alcadon Group vs. Avensia publ 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 Bonds Directory module to find actively traded corporate debentures issued by US companies.
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