Correlation Between Cibus Nordic and Castellum
Can any of the company-specific risk be diversified away by investing in both Cibus Nordic and Castellum 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 Cibus Nordic and Castellum into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Cibus Nordic Real and Castellum AB, you can compare the effects of market volatilities on Cibus Nordic and Castellum 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 Cibus Nordic with a short position of Castellum. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cibus Nordic and Castellum.
Diversification Opportunities for Cibus Nordic and Castellum
0.72 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Cibus and Castellum is 0.72. Overlapping area represents the amount of risk that can be diversified away by holding Cibus Nordic Real and Castellum AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Castellum AB and Cibus Nordic 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 Cibus Nordic Real are associated (or correlated) with Castellum. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Castellum AB has no effect on the direction of Cibus Nordic i.e., Cibus Nordic and Castellum go up and down completely randomly.
Pair Corralation between Cibus Nordic and Castellum
Assuming the 90 days trading horizon Cibus Nordic Real is expected to generate 1.2 times more return on investment than Castellum. However, Cibus Nordic is 1.2 times more volatile than Castellum AB. It trades about 0.04 of its potential returns per unit of risk. Castellum AB is currently generating about -0.09 per unit of risk. If you would invest 16,992 in Cibus Nordic Real on October 26, 2024 and sell it today you would earn a total of 378.00 from holding Cibus Nordic Real or generate 2.22% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Cibus Nordic Real vs. Castellum AB
Performance |
| Timeline |
| Cibus Nordic Real |
| Castellum AB |
Cibus Nordic and Castellum Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cibus Nordic and Castellum
The main advantage of trading using opposite Cibus Nordic and Castellum positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cibus Nordic position performs unexpectedly, Castellum 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 Castellum will offset losses from the drop in Castellum's long position.| Cibus Nordic vs. Castellum AB | Cibus Nordic vs. Samhllsbyggnadsbolaget i Norden | Cibus Nordic vs. Intrum Justitia AB | Cibus Nordic vs. Tele2 AB |
| Castellum vs. Fabege AB | Castellum vs. Samhllsbyggnadsbolaget i Norden | Castellum vs. Fastighets AB Balder | Castellum vs. Axfood 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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
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