Correlation Between Crayon Group and Carasent ASA
Can any of the company-specific risk be diversified away by investing in both Crayon Group and Carasent ASA 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 Crayon Group and Carasent ASA into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Crayon Group Holding and Carasent ASA, you can compare the effects of market volatilities on Crayon Group and Carasent ASA 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 Crayon Group with a short position of Carasent ASA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Crayon Group and Carasent ASA.
Diversification Opportunities for Crayon Group and Carasent ASA
-0.36 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Crayon and Carasent is -0.36. Overlapping area represents the amount of risk that can be diversified away by holding Crayon Group Holding and Carasent ASA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Carasent ASA and Crayon Group 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 Crayon Group Holding are associated (or correlated) with Carasent ASA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Carasent ASA has no effect on the direction of Crayon Group i.e., Crayon Group and Carasent ASA go up and down completely randomly.
Pair Corralation between Crayon Group and Carasent ASA
Assuming the 90 days trading horizon Crayon Group is expected to generate 1.7 times less return on investment than Carasent ASA. But when comparing it to its historical volatility, Crayon Group Holding is 1.03 times less risky than Carasent ASA. It trades about 0.02 of its potential returns per unit of risk. Carasent ASA is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 1,375 in Carasent ASA on September 3, 2024 and sell it today you would earn a total of 685.00 from holding Carasent ASA or generate 49.82% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Crayon Group Holding vs. Carasent ASA
Performance |
| Timeline |
| Crayon Group Holding |
| Carasent ASA |
Crayon Group and Carasent ASA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Crayon Group and Carasent ASA
The main advantage of trading using opposite Crayon Group and Carasent ASA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Crayon Group position performs unexpectedly, Carasent ASA 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 Carasent ASA will offset losses from the drop in Carasent ASA's long position.| Crayon Group vs. Zaptec AS | Crayon Group vs. Nordic Semiconductor ASA | Crayon Group vs. Scatec Solar OL | Crayon Group vs. Kitron ASA |
| Carasent ASA vs. Arcticzymes Technologies ASA | Carasent ASA vs. Smart Eye AB | Carasent ASA vs. Bergenbio ASA | Carasent ASA vs. Kitron ASA |
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 Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
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