Correlation Between Maha Energy and Cantargia
Can any of the company-specific risk be diversified away by investing in both Maha Energy 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 Maha Energy and Cantargia into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Maha Energy AB and Cantargia AB, you can compare the effects of market volatilities on Maha Energy 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 Maha Energy with a short position of Cantargia. Check out your portfolio center. Please also check ongoing floating volatility patterns of Maha Energy and Cantargia.
Diversification Opportunities for Maha Energy and Cantargia
0.65 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Maha and Cantargia is 0.65. Overlapping area represents the amount of risk that can be diversified away by holding Maha Energy AB and Cantargia AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cantargia AB and Maha Energy 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 Maha Energy 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 Maha Energy i.e., Maha Energy and Cantargia go up and down completely randomly.
Pair Corralation between Maha Energy and Cantargia
Assuming the 90 days trading horizon Maha Energy AB is expected to generate 0.53 times more return on investment than Cantargia. However, Maha Energy AB is 1.87 times less risky than Cantargia. It trades about -0.05 of its potential returns per unit of risk. Cantargia AB is currently generating about -0.14 per unit of risk. If you would invest 869.00 in Maha Energy AB on September 1, 2024 and sell it today you would lose (167.00) from holding Maha Energy AB or give up 19.22% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 99.22% |
| Values | Daily Returns |
Maha Energy AB vs. Cantargia AB
Performance |
| Timeline |
| Maha Energy AB |
| Cantargia AB |
Maha Energy and Cantargia Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Maha Energy and Cantargia
The main advantage of trading using opposite Maha Energy and Cantargia positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Maha Energy 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.| Maha Energy vs. GomSpace Group AB | Maha Energy vs. SaltX Technology Holding | Maha Energy vs. Ambu AS | Maha Energy vs. Fingerprint Cards AB |
| Cantargia vs. Hansa Biopharma AB | Cantargia vs. Oncopeptides AB | Cantargia vs. BioArctic AB | Cantargia vs. Alligator Bioscience 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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.
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