Correlation Between Coloplast and Erria AS
Can any of the company-specific risk be diversified away by investing in both Coloplast and Erria AS 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 Erria AS into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Coloplast AS and Erria AS, you can compare the effects of market volatilities on Coloplast and Erria AS 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 Erria AS. Check out your portfolio center. Please also check ongoing floating volatility patterns of Coloplast and Erria AS.
Diversification Opportunities for Coloplast and Erria AS
Very good diversification
The 3 months correlation between Coloplast and Erria is -0.39. Overlapping area represents the amount of risk that can be diversified away by holding Coloplast AS and Erria AS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Erria AS 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 Erria AS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Erria AS has no effect on the direction of Coloplast i.e., Coloplast and Erria AS go up and down completely randomly.
Pair Corralation between Coloplast and Erria AS
Assuming the 90 days trading horizon Coloplast is expected to generate 4.75 times less return on investment than Erria AS. But when comparing it to its historical volatility, Coloplast AS is 9.53 times less risky than Erria AS. It trades about 0.28 of its potential returns per unit of risk. Erria AS is currently generating about 0.14 of returns per unit of risk over similar time horizon. If you would invest 304.00 in Erria AS on October 25, 2024 and sell it today you would earn a total of 42.00 from holding Erria AS or generate 13.82% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 94.44% |
| Values | Daily Returns |
Coloplast AS vs. Erria AS
Performance |
| Timeline |
| Coloplast AS |
| Erria AS |
Coloplast and Erria AS Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Coloplast and Erria AS
The main advantage of trading using opposite Coloplast and Erria AS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Coloplast position performs unexpectedly, Erria AS 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 Erria AS will offset losses from the drop in Erria AS's long position.The idea behind Coloplast AS and Erria AS pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| Erria AS vs. PARKEN Sport Entertainment | Erria AS vs. Fynske Bank AS | Erria AS vs. Prime Office AS | Erria AS vs. Scandinavian Tobacco Group |
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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
Other Complementary Tools
| Volatility Analysis Get historical volatility and risk analysis based on latest market data | |
| Stock Screener Find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook. | |
| Cryptocurrency Center Build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency | |
| Portfolio Anywhere Track or share privately all of your investments from the convenience of any device | |
| Risk-Return Analysis View associations between returns expected from investment and the risk you assume |