Correlation Between FOM Technologies and CBrain AS
Can any of the company-specific risk be diversified away by investing in both FOM Technologies and CBrain 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 FOM Technologies and CBrain AS into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between FOM Technologies AS and cBrain AS, you can compare the effects of market volatilities on FOM Technologies and CBrain 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 FOM Technologies with a short position of CBrain AS. Check out your portfolio center. Please also check ongoing floating volatility patterns of FOM Technologies and CBrain AS.
Diversification Opportunities for FOM Technologies and CBrain AS
-0.08 | Correlation Coefficient |
Good diversification
The 3 months correlation between FOM and CBrain is -0.08. Overlapping area represents the amount of risk that can be diversified away by holding FOM Technologies AS and cBrain AS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on cBrain AS and FOM Technologies 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 FOM Technologies AS are associated (or correlated) with CBrain AS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of cBrain AS has no effect on the direction of FOM Technologies i.e., FOM Technologies and CBrain AS go up and down completely randomly.
Pair Corralation between FOM Technologies and CBrain AS
Assuming the 90 days trading horizon FOM Technologies AS is expected to under-perform the CBrain AS. In addition to that, FOM Technologies is 1.52 times more volatile than cBrain AS. It trades about -0.25 of its total potential returns per unit of risk. cBrain AS is currently generating about 0.05 per unit of volatility. If you would invest 18,940 in cBrain AS on November 3, 2024 and sell it today you would earn a total of 400.00 from holding cBrain AS or generate 2.11% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
FOM Technologies AS vs. cBrain AS
Performance |
| Timeline |
| FOM Technologies |
| cBrain AS |
FOM Technologies and CBrain AS Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with FOM Technologies and CBrain AS
The main advantage of trading using opposite FOM Technologies and CBrain AS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if FOM Technologies position performs unexpectedly, CBrain 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 CBrain AS will offset losses from the drop in CBrain AS's long position.| FOM Technologies vs. cBrain AS | FOM Technologies vs. Penneo AS | FOM Technologies vs. Shape Robotics AS | FOM Technologies vs. ALK Abell AS |
| CBrain AS vs. ChemoMetec AS | CBrain AS vs. Ambu AS | CBrain AS vs. Genmab AS | CBrain AS vs. Zealand Pharma AS |
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 Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
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