Correlation Between Combigene and Ziccum AB
Can any of the company-specific risk be diversified away by investing in both Combigene and Ziccum AB 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 Combigene and Ziccum AB into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Combigene AB and Ziccum AB, you can compare the effects of market volatilities on Combigene and Ziccum AB 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 Combigene with a short position of Ziccum AB. Check out your portfolio center. Please also check ongoing floating volatility patterns of Combigene and Ziccum AB.
Diversification Opportunities for Combigene and Ziccum AB
Good diversification
The 3 months correlation between Combigene and Ziccum is -0.1. Overlapping area represents the amount of risk that can be diversified away by holding Combigene AB and Ziccum AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ziccum AB and Combigene 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 Combigene AB are associated (or correlated) with Ziccum AB. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ziccum AB has no effect on the direction of Combigene i.e., Combigene and Ziccum AB go up and down completely randomly.
Pair Corralation between Combigene and Ziccum AB
Assuming the 90 days trading horizon Combigene AB is expected to generate 0.41 times more return on investment than Ziccum AB. However, Combigene AB is 2.41 times less risky than Ziccum AB. It trades about 0.12 of its potential returns per unit of risk. Ziccum AB is currently generating about -0.28 per unit of risk. If you would invest 240.00 in Combigene AB on September 12, 2024 and sell it today you would earn a total of 26.00 from holding Combigene AB or generate 10.83% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Combigene AB vs. Ziccum AB
Performance |
| Timeline |
| Combigene AB |
| Ziccum AB |
Combigene and Ziccum AB Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Combigene and Ziccum AB
The main advantage of trading using opposite Combigene and Ziccum AB positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Combigene position performs unexpectedly, Ziccum AB 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 Ziccum AB will offset losses from the drop in Ziccum AB's long position.The idea behind Combigene AB and Ziccum AB 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.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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.
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