Correlation Between CSL and DANIMER SCIENTIFIC
Can any of the company-specific risk be diversified away by investing in both CSL and DANIMER SCIENTIFIC 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 CSL and DANIMER SCIENTIFIC into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between CSL Limited and DANIMER SCIENTIFIC, you can compare the effects of market volatilities on CSL and DANIMER SCIENTIFIC 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 CSL with a short position of DANIMER SCIENTIFIC. Check out your portfolio center. Please also check ongoing floating volatility patterns of CSL and DANIMER SCIENTIFIC.
Diversification Opportunities for CSL and DANIMER SCIENTIFIC
0.81 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between CSL and DANIMER is 0.81. Overlapping area represents the amount of risk that can be diversified away by holding CSL Limited and DANIMER SCIENTIFIC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on DANIMER SCIENTIFIC and CSL 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 CSL Limited are associated (or correlated) with DANIMER SCIENTIFIC. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of DANIMER SCIENTIFIC has no effect on the direction of CSL i.e., CSL and DANIMER SCIENTIFIC go up and down completely randomly.
Pair Corralation between CSL and DANIMER SCIENTIFIC
Assuming the 90 days horizon CSL Limited is expected to generate 0.2 times more return on investment than DANIMER SCIENTIFIC. However, CSL Limited is 5.01 times less risky than DANIMER SCIENTIFIC. It trades about -0.04 of its potential returns per unit of risk. DANIMER SCIENTIFIC is currently generating about -0.08 per unit of risk. If you would invest 17,898 in CSL Limited on September 23, 2024 and sell it today you would lose (1,254) from holding CSL Limited or give up 7.01% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 99.23% |
| Values | Daily Returns |
CSL Limited vs. DANIMER SCIENTIFIC
Performance |
| Timeline |
| CSL Limited |
| DANIMER SCIENTIFIC |
CSL and DANIMER SCIENTIFIC Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CSL and DANIMER SCIENTIFIC
The main advantage of trading using opposite CSL and DANIMER SCIENTIFIC positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CSL position performs unexpectedly, DANIMER SCIENTIFIC 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 DANIMER SCIENTIFIC will offset losses from the drop in DANIMER SCIENTIFIC's long position.| CSL vs. Novo Nordisk AS | CSL vs. CSL LTD SPONADR | CSL vs. Mercedes Benz Group AG | CSL vs. Vertex Pharmaceuticals Incorporated |
| DANIMER SCIENTIFIC vs. Novo Nordisk AS | DANIMER SCIENTIFIC vs. CSL LTD SPONADR | DANIMER SCIENTIFIC vs. CSL Limited | DANIMER SCIENTIFIC vs. Mercedes Benz Group AG |
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 Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
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