Correlation Between Kreditbanken and Cessatech
Can any of the company-specific risk be diversified away by investing in both Kreditbanken and Cessatech 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 Kreditbanken and Cessatech into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Kreditbanken AS and Cessatech AS, you can compare the effects of market volatilities on Kreditbanken and Cessatech 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 Kreditbanken with a short position of Cessatech. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kreditbanken and Cessatech.
Diversification Opportunities for Kreditbanken and Cessatech
-0.1 | Correlation Coefficient |
Good diversification
The 3 months correlation between Kreditbanken and Cessatech is -0.1. Overlapping area represents the amount of risk that can be diversified away by holding Kreditbanken AS and Cessatech AS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cessatech AS and Kreditbanken 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 Kreditbanken AS are associated (or correlated) with Cessatech. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cessatech AS has no effect on the direction of Kreditbanken i.e., Kreditbanken and Cessatech go up and down completely randomly.
Pair Corralation between Kreditbanken and Cessatech
Assuming the 90 days trading horizon Kreditbanken AS is expected to generate 0.3 times more return on investment than Cessatech. However, Kreditbanken AS is 3.33 times less risky than Cessatech. It trades about 0.04 of its potential returns per unit of risk. Cessatech AS is currently generating about -0.13 per unit of risk. If you would invest 403,072 in Kreditbanken AS on September 4, 2024 and sell it today you would earn a total of 96,928 from holding Kreditbanken AS or generate 24.05% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 4.64% |
| Values | Daily Returns |
Kreditbanken AS vs. Cessatech AS
Performance |
| Timeline |
| Kreditbanken AS |
| Cessatech AS |
Kreditbanken and Cessatech Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Kreditbanken and Cessatech
The main advantage of trading using opposite Kreditbanken and Cessatech positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kreditbanken position performs unexpectedly, Cessatech 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 Cessatech will offset losses from the drop in Cessatech's long position.| Kreditbanken vs. FLSmidth Co | Kreditbanken vs. Danske Bank AS | Kreditbanken vs. ISS AS | Kreditbanken vs. DSV Panalpina AS |
| Cessatech vs. Novo Nordisk AS | Cessatech vs. Nordea Bank Abp | Cessatech vs. DSV Panalpina AS | Cessatech vs. AP Mller |
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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.
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