Correlation Between Cinis Fertilizer and Rottneros
Can any of the company-specific risk be diversified away by investing in both Cinis Fertilizer and Rottneros 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 Rottneros 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 Rottneros AB, you can compare the effects of market volatilities on Cinis Fertilizer and Rottneros 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 Rottneros. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cinis Fertilizer and Rottneros.
Diversification Opportunities for Cinis Fertilizer and Rottneros
0.82 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Cinis and Rottneros is 0.82. Overlapping area represents the amount of risk that can be diversified away by holding Cinis Fertilizer AB and Rottneros AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Rottneros 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 Rottneros. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Rottneros AB has no effect on the direction of Cinis Fertilizer i.e., Cinis Fertilizer and Rottneros go up and down completely randomly.
Pair Corralation between Cinis Fertilizer and Rottneros
Assuming the 90 days trading horizon Cinis Fertilizer AB is expected to under-perform the Rottneros. In addition to that, Cinis Fertilizer is 1.97 times more volatile than Rottneros AB. It trades about -0.29 of its total potential returns per unit of risk. Rottneros AB is currently generating about -0.08 per unit of volatility. If you would invest 976.00 in Rottneros AB on September 1, 2024 and sell it today you would lose (41.00) from holding Rottneros AB or give up 4.2% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 95.65% |
| Values | Daily Returns |
Cinis Fertilizer AB vs. Rottneros AB
Performance |
| Timeline |
| Cinis Fertilizer |
| Rottneros AB |
Cinis Fertilizer and Rottneros Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cinis Fertilizer and Rottneros
The main advantage of trading using opposite Cinis Fertilizer and Rottneros positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cinis Fertilizer position performs unexpectedly, Rottneros 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 Rottneros will offset losses from the drop in Rottneros' long position.| Cinis Fertilizer vs. Upsales Technology AB | Cinis Fertilizer vs. COOR Service Management | Cinis Fertilizer vs. Arctic Blue Beverages | Cinis Fertilizer vs. Beowulf Mining PLC |
| Rottneros vs. Holmen AB | Rottneros vs. Svenska Cellulosa Aktiebolaget | Rottneros vs. Husqvarna AB | Rottneros vs. Alfa Laval 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 Portfolio Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.
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