Correlation Between Conferize and Artha Optimum
Can any of the company-specific risk be diversified away by investing in both Conferize and Artha Optimum 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 Conferize and Artha Optimum into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Conferize AS and Artha Optimum AS, you can compare the effects of market volatilities on Conferize and Artha Optimum 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 Conferize with a short position of Artha Optimum. Check out your portfolio center. Please also check ongoing floating volatility patterns of Conferize and Artha Optimum.
Diversification Opportunities for Conferize and Artha Optimum
-0.37 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Conferize and Artha is -0.37. Overlapping area represents the amount of risk that can be diversified away by holding Conferize AS and Artha Optimum AS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Artha Optimum AS and Conferize 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 Conferize AS are associated (or correlated) with Artha Optimum. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Artha Optimum AS has no effect on the direction of Conferize i.e., Conferize and Artha Optimum go up and down completely randomly.
Pair Corralation between Conferize and Artha Optimum
Assuming the 90 days trading horizon Conferize AS is expected to under-perform the Artha Optimum. In addition to that, Conferize is 30.57 times more volatile than Artha Optimum AS. It trades about -0.19 of its total potential returns per unit of risk. Artha Optimum AS is currently generating about -0.04 per unit of volatility. If you would invest 604,650 in Artha Optimum AS on August 29, 2024 and sell it today you would lose (1,200) from holding Artha Optimum AS or give up 0.2% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 86.36% |
| Values | Daily Returns |
Conferize AS vs. Artha Optimum AS
Performance |
| Timeline |
| Conferize AS |
| Artha Optimum AS |
Conferize and Artha Optimum Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Conferize and Artha Optimum
The main advantage of trading using opposite Conferize and Artha Optimum positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Conferize position performs unexpectedly, Artha Optimum 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 Artha Optimum will offset losses from the drop in Artha Optimum's long position.The idea behind Conferize AS and Artha Optimum 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.| Artha Optimum vs. Groenlandsbanken AS | Artha Optimum vs. Strategic Investments AS | Artha Optimum vs. Spar Nord Bank | Artha Optimum vs. North Media 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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.
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