Correlation Between CSL and Actinogen Medical
Can any of the company-specific risk be diversified away by investing in both CSL and Actinogen Medical 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 Actinogen Medical into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between CSL and Actinogen Medical, you can compare the effects of market volatilities on CSL and Actinogen Medical 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 Actinogen Medical. Check out your portfolio center. Please also check ongoing floating volatility patterns of CSL and Actinogen Medical.
Diversification Opportunities for CSL and Actinogen Medical
0.47 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between CSL and Actinogen is 0.47. Overlapping area represents the amount of risk that can be diversified away by holding CSL and Actinogen Medical in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Actinogen Medical 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 are associated (or correlated) with Actinogen Medical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Actinogen Medical has no effect on the direction of CSL i.e., CSL and Actinogen Medical go up and down completely randomly.
Pair Corralation between CSL and Actinogen Medical
Assuming the 90 days trading horizon CSL is expected to generate 14.78 times less return on investment than Actinogen Medical. But when comparing it to its historical volatility, CSL is 8.28 times less risky than Actinogen Medical. It trades about 0.03 of its potential returns per unit of risk. Actinogen Medical is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 2.70 in Actinogen Medical on September 12, 2024 and sell it today you would earn a total of 0.40 from holding Actinogen Medical or generate 14.81% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
CSL vs. Actinogen Medical
Performance |
| Timeline |
| CSL |
| Actinogen Medical |
CSL and Actinogen Medical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CSL and Actinogen Medical
The main advantage of trading using opposite CSL and Actinogen Medical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CSL position performs unexpectedly, Actinogen Medical 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 Actinogen Medical will offset losses from the drop in Actinogen Medical's long position.The idea behind CSL and Actinogen Medical 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.| Actinogen Medical vs. CSL | Actinogen Medical vs. Tamawood | Actinogen Medical vs. Cochlear | Actinogen Medical vs. Rea Group |
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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.
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