Correlation Between Penneo AS and CBrain AS
Can any of the company-specific risk be diversified away by investing in both Penneo AS 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 Penneo AS and CBrain AS into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Penneo AS and cBrain AS, you can compare the effects of market volatilities on Penneo AS 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 Penneo AS with a short position of CBrain AS. Check out your portfolio center. Please also check ongoing floating volatility patterns of Penneo AS and CBrain AS.
Diversification Opportunities for Penneo AS and CBrain AS
Significant diversification
The 3 months correlation between Penneo and CBrain is 0.07. Overlapping area represents the amount of risk that can be diversified away by holding Penneo AS and cBrain AS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on cBrain AS and Penneo AS 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 Penneo 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 Penneo AS i.e., Penneo AS and CBrain AS go up and down completely randomly.
Pair Corralation between Penneo AS and CBrain AS
Assuming the 90 days trading horizon Penneo AS is expected to generate 3.29 times less return on investment than CBrain AS. But when comparing it to its historical volatility, Penneo AS is 1.23 times less risky than CBrain AS. It trades about 0.01 of its potential returns per unit of risk. cBrain AS is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 17,200 in cBrain AS on August 25, 2024 and sell it today you would earn a total of 3,100 from holding cBrain AS or generate 18.02% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Penneo AS vs. cBrain AS
Performance |
| Timeline |
| Penneo AS |
| cBrain AS |
Penneo AS and CBrain AS Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Penneo AS and CBrain AS
The main advantage of trading using opposite Penneo AS and CBrain AS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Penneo AS 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.| Penneo AS vs. cBrain AS | Penneo AS vs. FOM Technologies AS | Penneo AS vs. ChemoMetec AS | Penneo AS vs. BioPorto |
| CBrain AS vs. ChemoMetec AS | CBrain AS vs. Ambu AS | CBrain AS vs. Genmab AS | CBrain AS vs. Zealand Pharma AS |
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 Portfolio Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.
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