Correlation Between Cell Impact and Momentum Group
Can any of the company-specific risk be diversified away by investing in both Cell Impact and Momentum 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 Momentum 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 Momentum Group AB, you can compare the effects of market volatilities on Cell Impact and Momentum 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 Momentum Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cell Impact and Momentum Group.
Diversification Opportunities for Cell Impact and Momentum Group
0.09 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Cell and Momentum is 0.09. Overlapping area represents the amount of risk that can be diversified away by holding Cell Impact AB and Momentum Group AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Momentum 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 Momentum Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Momentum Group AB has no effect on the direction of Cell Impact i.e., Cell Impact and Momentum Group go up and down completely randomly.
Pair Corralation between Cell Impact and Momentum Group
Assuming the 90 days horizon Cell Impact AB is expected to under-perform the Momentum Group. In addition to that, Cell Impact is 3.7 times more volatile than Momentum Group AB. It trades about -0.03 of its total potential returns per unit of risk. Momentum Group AB is currently generating about 0.09 per unit of volatility. If you would invest 5,768 in Momentum Group AB on September 24, 2024 and sell it today you would earn a total of 11,332 from holding Momentum Group AB or generate 196.46% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Cell Impact AB vs. Momentum Group AB
Performance |
| Timeline |
| Cell Impact AB |
| Momentum Group AB |
Cell Impact and Momentum Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cell Impact and Momentum Group
The main advantage of trading using opposite Cell Impact and Momentum Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cell Impact position performs unexpectedly, Momentum 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 Momentum Group will offset losses from the drop in Momentum Group's long position.| Cell Impact vs. Humble Group AB | Cell Impact vs. Enad Global 7 | Cell Impact vs. Goodbye Kansas Group | Cell Impact vs. Mekonomen AB |
| Momentum Group vs. Indutrade AB | Momentum Group vs. Bufab Holding AB | Momentum Group vs. Alligo AB Series | Momentum Group vs. Teqnion 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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
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