Correlation Between Coloplast and Flgger Group
Can any of the company-specific risk be diversified away by investing in both Coloplast and Flgger Group 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 Flgger Group into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Coloplast AS and Flgger group AS, you can compare the effects of market volatilities on Coloplast and Flgger Group 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 Flgger Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of Coloplast and Flgger Group.
Diversification Opportunities for Coloplast and Flgger Group
-0.63 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Coloplast and Flgger is -0.63. Overlapping area represents the amount of risk that can be diversified away by holding Coloplast AS and Flgger group AS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Flgger group 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 Flgger Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Flgger group AS has no effect on the direction of Coloplast i.e., Coloplast and Flgger Group go up and down completely randomly.
Pair Corralation between Coloplast and Flgger Group
Assuming the 90 days trading horizon Coloplast AS is expected to generate 1.22 times more return on investment than Flgger Group. However, Coloplast is 1.22 times more volatile than Flgger group AS. It trades about -0.01 of its potential returns per unit of risk. Flgger group AS is currently generating about -0.09 per unit of risk. If you would invest 78,600 in Coloplast AS on November 8, 2024 and sell it today you would lose (220.00) from holding Coloplast AS or give up 0.28% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Coloplast AS vs. Flgger group AS
Performance |
| Timeline |
| Coloplast AS |
| Flgger group AS |
Coloplast and Flgger Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Coloplast and Flgger Group
The main advantage of trading using opposite Coloplast and Flgger Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Coloplast position performs unexpectedly, Flgger Group 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 Flgger Group will offset losses from the drop in Flgger Group's long position.The idea behind Coloplast AS and Flgger group 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.| Flgger Group vs. Per Aarsleff Holding | Flgger Group vs. North Media AS | Flgger Group vs. HH International AS | Flgger Group vs. Matas AS |
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 Anywhere module to track or share privately all of your investments from the convenience of any device.
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