Correlation Between Clean Motion and Arctic Gold
Can any of the company-specific risk be diversified away by investing in both Clean Motion and Arctic Gold 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 Clean Motion and Arctic Gold into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Clean Motion AB and Arctic Gold Publ, you can compare the effects of market volatilities on Clean Motion and Arctic Gold 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 Clean Motion with a short position of Arctic Gold. Check out your portfolio center. Please also check ongoing floating volatility patterns of Clean Motion and Arctic Gold.
Diversification Opportunities for Clean Motion and Arctic Gold
0.81 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Clean and Arctic is 0.81. Overlapping area represents the amount of risk that can be diversified away by holding Clean Motion AB and Arctic Gold Publ in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Arctic Gold Publ and Clean Motion 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 Clean Motion AB are associated (or correlated) with Arctic Gold. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Arctic Gold Publ has no effect on the direction of Clean Motion i.e., Clean Motion and Arctic Gold go up and down completely randomly.
Pair Corralation between Clean Motion and Arctic Gold
Assuming the 90 days trading horizon Clean Motion AB is expected to under-perform the Arctic Gold. But the stock apears to be less risky and, when comparing its historical volatility, Clean Motion AB is 1.36 times less risky than Arctic Gold. The stock trades about -0.2 of its potential returns per unit of risk. The Arctic Gold Publ is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest 22.00 in Arctic Gold Publ on November 3, 2024 and sell it today you would earn a total of 2.00 from holding Arctic Gold Publ or generate 9.09% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Clean Motion AB vs. Arctic Gold Publ
Performance |
| Timeline |
| Clean Motion AB |
| Arctic Gold Publ |
Clean Motion and Arctic Gold Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Clean Motion and Arctic Gold
The main advantage of trading using opposite Clean Motion and Arctic Gold positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Clean Motion position performs unexpectedly, Arctic Gold 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 Arctic Gold will offset losses from the drop in Arctic Gold's long position.| Clean Motion vs. Doxa AB | Clean Motion vs. Cortus Energy AB | Clean Motion vs. Online Brands Nordic | Clean Motion vs. NetJobs Group 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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.
Other Complementary Tools
| Bonds Directory Find actively traded corporate debentures issued by US companies | |
| Companies Directory Evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals | |
| Cryptocurrency Center Build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency | |
| Share Portfolio Track or share privately all of your investments from the convenience of any device | |
| ETFs Find actively traded Exchange Traded Funds (ETF) from around the world |