Correlation Between Circa Group and Carasent ASA
Can any of the company-specific risk be diversified away by investing in both Circa Group and Carasent ASA 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 Circa Group and Carasent ASA into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Circa Group AS and Carasent ASA, you can compare the effects of market volatilities on Circa Group and Carasent ASA 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 Circa Group with a short position of Carasent ASA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Circa Group and Carasent ASA.
Diversification Opportunities for Circa Group and Carasent ASA
0.47 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Circa and Carasent is 0.47. Overlapping area represents the amount of risk that can be diversified away by holding Circa Group AS and Carasent ASA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Carasent ASA and Circa Group 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 Circa Group AS are associated (or correlated) with Carasent ASA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Carasent ASA has no effect on the direction of Circa Group i.e., Circa Group and Carasent ASA go up and down completely randomly.
Pair Corralation between Circa Group and Carasent ASA
Assuming the 90 days trading horizon Circa Group AS is expected to under-perform the Carasent ASA. In addition to that, Circa Group is 1.96 times more volatile than Carasent ASA. It trades about -0.04 of its total potential returns per unit of risk. Carasent ASA is currently generating about 0.04 per unit of volatility. If you would invest 1,336 in Carasent ASA on September 2, 2024 and sell it today you would earn a total of 724.00 from holding Carasent ASA or generate 54.19% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Circa Group AS vs. Carasent ASA
Performance |
| Timeline |
| Circa Group AS |
| Carasent ASA |
Circa Group and Carasent ASA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Circa Group and Carasent ASA
The main advantage of trading using opposite Circa Group and Carasent ASA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Circa Group position performs unexpectedly, Carasent ASA 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 Carasent ASA will offset losses from the drop in Carasent ASA's long position.| Circa Group vs. Carasent ASA | Circa Group vs. Bergenbio ASA | Circa Group vs. Photocure | Circa Group vs. Kitron ASA |
| Carasent ASA vs. Arcticzymes Technologies ASA | Carasent ASA vs. Smart Eye AB | Carasent ASA vs. Bergenbio ASA | Carasent ASA vs. Kitron ASA |
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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.
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