Correlation Between Crayon Group and Zaptec AS
Can any of the company-specific risk be diversified away by investing in both Crayon Group and Zaptec 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 Crayon Group and Zaptec AS 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 Zaptec AS, you can compare the effects of market volatilities on Crayon Group and Zaptec 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 Crayon Group with a short position of Zaptec AS. Check out your portfolio center. Please also check ongoing floating volatility patterns of Crayon Group and Zaptec AS.
Diversification Opportunities for Crayon Group and Zaptec AS
0.2 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Crayon and Zaptec is 0.2. Overlapping area represents the amount of risk that can be diversified away by holding Crayon Group Holding and Zaptec AS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Zaptec AS 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 Zaptec AS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Zaptec AS has no effect on the direction of Crayon Group i.e., Crayon Group and Zaptec AS go up and down completely randomly.
Pair Corralation between Crayon Group and Zaptec AS
Assuming the 90 days trading horizon Crayon Group Holding is expected to generate 0.84 times more return on investment than Zaptec AS. However, Crayon Group Holding is 1.19 times less risky than Zaptec AS. It trades about 0.04 of its potential returns per unit of risk. Zaptec AS is currently generating about -0.05 per unit of risk. If you would invest 11,320 in Crayon Group Holding on September 1, 2024 and sell it today you would earn a total of 1,330 from holding Crayon Group Holding or generate 11.75% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Crayon Group Holding vs. Zaptec AS
Performance |
| Timeline |
| Crayon Group Holding |
| Zaptec AS |
Crayon Group and Zaptec AS Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Crayon Group and Zaptec AS
The main advantage of trading using opposite Crayon Group and Zaptec AS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Crayon Group position performs unexpectedly, Zaptec 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 Zaptec AS will offset losses from the drop in Zaptec AS'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 |
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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.
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