Correlation Between Napatech and Circa Group
Can any of the company-specific risk be diversified away by investing in both Napatech and Circa Group 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 Napatech and Circa Group into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Napatech AS and Circa Group AS, you can compare the effects of market volatilities on Napatech and Circa Group 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 Napatech with a short position of Circa Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of Napatech and Circa Group.
Diversification Opportunities for Napatech and Circa Group
-0.48 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Napatech and Circa is -0.48. Overlapping area represents the amount of risk that can be diversified away by holding Napatech AS and Circa Group AS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Circa Group AS and Napatech 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 Napatech AS are associated (or correlated) with Circa Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Circa Group AS has no effect on the direction of Napatech i.e., Napatech and Circa Group go up and down completely randomly.
Pair Corralation between Napatech and Circa Group
Assuming the 90 days trading horizon Napatech AS is expected to generate 0.45 times more return on investment than Circa Group. However, Napatech AS is 2.25 times less risky than Circa Group. It trades about 0.07 of its potential returns per unit of risk. Circa Group AS is currently generating about -0.04 per unit of risk. If you would invest 1,295 in Napatech AS on September 4, 2024 and sell it today you would earn a total of 925.00 from holding Napatech AS or generate 71.43% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Napatech AS vs. Circa Group AS
Performance |
| Timeline |
| Napatech AS |
| Circa Group AS |
Napatech and Circa Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Napatech and Circa Group
The main advantage of trading using opposite Napatech and Circa Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Napatech position performs unexpectedly, Circa Group 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 Circa Group will offset losses from the drop in Circa Group's long position.| Napatech vs. Idex ASA | Napatech vs. Next Biometrics Group | Napatech vs. Polight ASA | Napatech vs. Kitron ASA |
| Circa Group vs. Sogn Sparebank | Circa Group vs. Nordic Mining ASA | Circa Group vs. Lea Bank ASA | Circa Group vs. Helgeland Sparebank |
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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.
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