Correlation Between Corline Biomedical and Gabather
Can any of the company-specific risk be diversified away by investing in both Corline Biomedical 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 Corline Biomedical and Gabather into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Corline Biomedical AB and Gabather AB, you can compare the effects of market volatilities on Corline Biomedical 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 Corline Biomedical with a short position of Gabather. Check out your portfolio center. Please also check ongoing floating volatility patterns of Corline Biomedical and Gabather.
Diversification Opportunities for Corline Biomedical and Gabather
0.69 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Corline and Gabather is 0.69. Overlapping area represents the amount of risk that can be diversified away by holding Corline Biomedical AB and Gabather AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gabather AB and Corline Biomedical 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 Corline Biomedical 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 Corline Biomedical i.e., Corline Biomedical and Gabather go up and down completely randomly.
Pair Corralation between Corline Biomedical and Gabather
Assuming the 90 days trading horizon Corline Biomedical AB is expected to under-perform the Gabather. But the stock apears to be less risky and, when comparing its historical volatility, Corline Biomedical AB is 2.95 times less risky than Gabather. The stock trades about -0.14 of its potential returns per unit of risk. The Gabather AB is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 52.00 in Gabather AB on September 1, 2024 and sell it today you would lose (4.00) from holding Gabather AB or give up 7.69% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 95.65% |
| Values | Daily Returns |
Corline Biomedical AB vs. Gabather AB
Performance |
| Timeline |
| Corline Biomedical |
| Gabather AB |
Corline Biomedical and Gabather Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Corline Biomedical and Gabather
The main advantage of trading using opposite Corline Biomedical and Gabather positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Corline Biomedical 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.| Corline Biomedical vs. Cantargia AB | Corline Biomedical vs. Kancera AB | Corline Biomedical vs. Gabather AB | Corline Biomedical vs. Genovis 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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