Correlation Between Cinis Fertilizer and Gabather
Can any of the company-specific risk be diversified away by investing in both Cinis Fertilizer and Gabather 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 Cinis Fertilizer and Gabather into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Cinis Fertilizer AB and Gabather AB, you can compare the effects of market volatilities on Cinis Fertilizer and Gabather 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 Cinis Fertilizer with a short position of Gabather. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cinis Fertilizer and Gabather.
Diversification Opportunities for Cinis Fertilizer and Gabather
0.82 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Cinis and Gabather is 0.82. Overlapping area represents the amount of risk that can be diversified away by holding Cinis Fertilizer AB and Gabather AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gabather AB and Cinis Fertilizer 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 Cinis Fertilizer AB are associated (or correlated) with Gabather. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Gabather AB has no effect on the direction of Cinis Fertilizer i.e., Cinis Fertilizer and Gabather go up and down completely randomly.
Pair Corralation between Cinis Fertilizer and Gabather
Assuming the 90 days trading horizon Cinis Fertilizer AB is expected to under-perform the Gabather. But the stock apears to be less risky and, when comparing its historical volatility, Cinis Fertilizer AB is 3.22 times less risky than Gabather. The stock trades about -0.06 of its potential returns per unit of risk. The Gabather AB is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest 349.00 in Gabather AB on December 1, 2024 and sell it today you would lose (336.00) from holding Gabather AB or give up 96.28% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 99.8% |
| Values | Daily Returns |
Cinis Fertilizer AB vs. Gabather AB
Performance |
| Timeline |
| Cinis Fertilizer |
| Gabather AB |
Cinis Fertilizer and Gabather Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cinis Fertilizer and Gabather
The main advantage of trading using opposite Cinis Fertilizer and Gabather positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cinis Fertilizer position performs unexpectedly, Gabather 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 Gabather will offset losses from the drop in Gabather's long position.| Cinis Fertilizer vs. Nordic Iron Ore | Cinis Fertilizer vs. TradeDoubler AB | Cinis Fertilizer vs. Arion banki hf | Cinis Fertilizer vs. Nordea Bank Abp |
| Gabather vs. Sprint Bioscience AB | Gabather vs. Corline Biomedical AB | Gabather vs. Cantargia AB | Gabather vs. Lidds 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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
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