Correlation Between Enorama Pharma and Cantargia
Can any of the company-specific risk be diversified away by investing in both Enorama Pharma and Cantargia 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 Enorama Pharma and Cantargia into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Enorama Pharma AB and Cantargia AB, you can compare the effects of market volatilities on Enorama Pharma and Cantargia 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 Enorama Pharma with a short position of Cantargia. Check out your portfolio center. Please also check ongoing floating volatility patterns of Enorama Pharma and Cantargia.
Diversification Opportunities for Enorama Pharma and Cantargia
0.64 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Enorama and Cantargia is 0.64. Overlapping area represents the amount of risk that can be diversified away by holding Enorama Pharma AB and Cantargia AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cantargia AB and Enorama Pharma 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 Enorama Pharma AB are associated (or correlated) with Cantargia. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cantargia AB has no effect on the direction of Enorama Pharma i.e., Enorama Pharma and Cantargia go up and down completely randomly.
Pair Corralation between Enorama Pharma and Cantargia
Assuming the 90 days trading horizon Enorama Pharma AB is expected to generate 1.44 times more return on investment than Cantargia. However, Enorama Pharma is 1.44 times more volatile than Cantargia AB. It trades about 0.04 of its potential returns per unit of risk. Cantargia AB is currently generating about 0.01 per unit of risk. If you would invest 419.00 in Enorama Pharma AB on August 29, 2024 and sell it today you would lose (58.00) from holding Enorama Pharma AB or give up 13.84% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Enorama Pharma AB vs. Cantargia AB
Performance |
| Timeline |
| Enorama Pharma AB |
| Cantargia AB |
Enorama Pharma and Cantargia Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Enorama Pharma and Cantargia
The main advantage of trading using opposite Enorama Pharma and Cantargia positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Enorama Pharma position performs unexpectedly, Cantargia 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 Cantargia will offset losses from the drop in Cantargia's long position.| Enorama Pharma vs. Cantargia AB | Enorama Pharma vs. Enzymatica publ AB | Enorama Pharma vs. Lidds AB | Enorama Pharma vs. BioArctic AB |
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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.
Other Complementary Tools
| Volatility Analysis Get historical volatility and risk analysis based on latest market data | |
| Correlation Analysis Reduce portfolio risk simply by holding instruments which are not perfectly correlated | |
| Stock Screener Find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook. | |
| Bonds Directory Find actively traded corporate debentures issued by US companies | |
| Efficient Frontier Plot and analyze your portfolio and positions against risk-return landscape of the market. |