Correlation Between MapsPeople and CBrain AS
Can any of the company-specific risk be diversified away by investing in both MapsPeople 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 MapsPeople and CBrain AS into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between MapsPeople AS and cBrain AS, you can compare the effects of market volatilities on MapsPeople 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 MapsPeople with a short position of CBrain AS. Check out your portfolio center. Please also check ongoing floating volatility patterns of MapsPeople and CBrain AS.
Diversification Opportunities for MapsPeople and CBrain AS
-0.04 | Correlation Coefficient |
Good diversification
The 3 months correlation between MapsPeople and CBrain is -0.04. Overlapping area represents the amount of risk that can be diversified away by holding MapsPeople AS and cBrain AS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on cBrain AS and MapsPeople 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 MapsPeople 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 MapsPeople i.e., MapsPeople and CBrain AS go up and down completely randomly.
Pair Corralation between MapsPeople and CBrain AS
Assuming the 90 days trading horizon MapsPeople AS is expected to under-perform the CBrain AS. In addition to that, MapsPeople is 2.99 times more volatile than cBrain AS. It trades about -0.04 of its total potential returns per unit of risk. cBrain AS is currently generating about 0.01 per unit of volatility. If you would invest 20,150 in cBrain AS on August 29, 2024 and sell it today you would lose (150.00) from holding cBrain AS or give up 0.74% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
MapsPeople AS vs. cBrain AS
Performance |
| Timeline |
| MapsPeople AS |
| cBrain AS |
MapsPeople and CBrain AS Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with MapsPeople and CBrain AS
The main advantage of trading using opposite MapsPeople and CBrain AS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if MapsPeople 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.| MapsPeople vs. Penneo AS | MapsPeople vs. Orderyoyo AS | MapsPeople vs. FOM Technologies AS | MapsPeople vs. Shape Robotics AS |
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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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.
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