Correlation Between Claranova and FreelanceCom
Can any of the company-specific risk be diversified away by investing in both Claranova and FreelanceCom 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 Claranova and FreelanceCom into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Claranova SE and FreelanceCom, you can compare the effects of market volatilities on Claranova and FreelanceCom 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 Claranova with a short position of FreelanceCom. Check out your portfolio center. Please also check ongoing floating volatility patterns of Claranova and FreelanceCom.
Diversification Opportunities for Claranova and FreelanceCom
-0.21 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Claranova and FreelanceCom is -0.21. Overlapping area represents the amount of risk that can be diversified away by holding Claranova SE and FreelanceCom in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on FreelanceCom and Claranova 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 Claranova SE are associated (or correlated) with FreelanceCom. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of FreelanceCom has no effect on the direction of Claranova i.e., Claranova and FreelanceCom go up and down completely randomly.
Pair Corralation between Claranova and FreelanceCom
Assuming the 90 days trading horizon Claranova SE is expected to under-perform the FreelanceCom. In addition to that, Claranova is 1.07 times more volatile than FreelanceCom. It trades about -0.04 of its total potential returns per unit of risk. FreelanceCom is currently generating about 0.02 per unit of volatility. If you would invest 280.00 in FreelanceCom on September 19, 2024 and sell it today you would earn a total of 2.00 from holding FreelanceCom or generate 0.71% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Claranova SE vs. FreelanceCom
Performance |
| Timeline |
| Claranova SE |
| FreelanceCom |
Claranova and FreelanceCom Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Claranova and FreelanceCom
The main advantage of trading using opposite Claranova and FreelanceCom positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Claranova position performs unexpectedly, FreelanceCom 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 FreelanceCom will offset losses from the drop in FreelanceCom's long position.| Claranova vs. Solutions 30 SE | Claranova vs. BigBen Interactive | Claranova vs. SA Catana Group | Claranova vs. Solocal Group SA |
| FreelanceCom vs. Claranova SE | FreelanceCom vs. SA Catana Group | FreelanceCom vs. Mediantechn | FreelanceCom vs. Groupe LDLC SA |
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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.
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