Correlation Between Coloplast and Top Glove
Can any of the company-specific risk be diversified away by investing in both Coloplast and Top Glove 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 Coloplast and Top Glove into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Coloplast AS and Top Glove, you can compare the effects of market volatilities on Coloplast and Top Glove 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 Coloplast with a short position of Top Glove. Check out your portfolio center. Please also check ongoing floating volatility patterns of Coloplast and Top Glove.
Diversification Opportunities for Coloplast and Top Glove
Very good diversification
The 3 months correlation between Coloplast and Top is -0.48. Overlapping area represents the amount of risk that can be diversified away by holding Coloplast AS and Top Glove in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Top Glove and Coloplast 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 Coloplast AS are associated (or correlated) with Top Glove. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Top Glove has no effect on the direction of Coloplast i.e., Coloplast and Top Glove go up and down completely randomly.
Pair Corralation between Coloplast and Top Glove
Assuming the 90 days horizon Coloplast is expected to generate 10.74 times less return on investment than Top Glove. But when comparing it to its historical volatility, Coloplast AS is 2.61 times less risky than Top Glove. It trades about 0.05 of its potential returns per unit of risk. Top Glove is currently generating about 0.2 of returns per unit of risk over similar time horizon. If you would invest 20.00 in Top Glove on August 31, 2024 and sell it today you would earn a total of 5.00 from holding Top Glove or generate 25.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Coloplast AS vs. Top Glove
Performance |
| Timeline |
| Coloplast AS |
| Top Glove |
Coloplast and Top Glove Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Coloplast and Top Glove
The main advantage of trading using opposite Coloplast and Top Glove positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Coloplast position performs unexpectedly, Top Glove 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 Top Glove will offset losses from the drop in Top Glove's long position.| Coloplast vs. Sysmex Corp | Coloplast vs. Straumann Holding AG | Coloplast vs. Essilor International SA | Coloplast vs. EssilorLuxottica Socit anonyme |
| Top Glove vs. Sysmex Corp | Top Glove vs. Coloplast AS | Top Glove vs. Essilor International SA | Top Glove vs. EssilorLuxottica Socit anonyme |
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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.
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