Correlation Between MapsPeople and Cessatech
Can any of the company-specific risk be diversified away by investing in both MapsPeople 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 MapsPeople and Cessatech into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between MapsPeople AS and Cessatech AS, you can compare the effects of market volatilities on MapsPeople 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 MapsPeople with a short position of Cessatech. Check out your portfolio center. Please also check ongoing floating volatility patterns of MapsPeople and Cessatech.
Diversification Opportunities for MapsPeople and Cessatech
0.01 | Correlation Coefficient |
Significant diversification
The 3 months correlation between MapsPeople and Cessatech is 0.01. Overlapping area represents the amount of risk that can be diversified away by holding MapsPeople AS and Cessatech AS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cessatech 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 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 MapsPeople i.e., MapsPeople and Cessatech go up and down completely randomly.
Pair Corralation between MapsPeople and Cessatech
Assuming the 90 days trading horizon MapsPeople AS is expected to generate 2.27 times more return on investment than Cessatech. However, MapsPeople is 2.27 times more volatile than Cessatech AS. It trades about -0.01 of its potential returns per unit of risk. Cessatech AS is currently generating about -0.05 per unit of risk. If you would invest 162.00 in MapsPeople AS on August 31, 2024 and sell it today you would lose (23.00) from holding MapsPeople AS or give up 14.2% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 86.96% |
| Values | Daily Returns |
MapsPeople AS vs. Cessatech AS
Performance |
| Timeline |
| MapsPeople AS |
| Cessatech AS |
MapsPeople and Cessatech Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with MapsPeople and Cessatech
The main advantage of trading using opposite MapsPeople and Cessatech positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if MapsPeople 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.| MapsPeople vs. Penneo AS | MapsPeople vs. Orderyoyo AS | MapsPeople vs. FOM Technologies AS | MapsPeople vs. Shape Robotics 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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.
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