Correlation Between Stenocare and Columbus
Can any of the company-specific risk be diversified away by investing in both Stenocare and Columbus 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 Stenocare and Columbus into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Stenocare AS and Columbus AS, you can compare the effects of market volatilities on Stenocare and Columbus 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 Stenocare with a short position of Columbus. Check out your portfolio center. Please also check ongoing floating volatility patterns of Stenocare and Columbus.
Diversification Opportunities for Stenocare and Columbus
Pay attention - limited upside
The 3 months correlation between Stenocare and Columbus is -0.79. Overlapping area represents the amount of risk that can be diversified away by holding Stenocare AS and Columbus AS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Columbus AS and Stenocare 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 Stenocare AS are associated (or correlated) with Columbus. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Columbus AS has no effect on the direction of Stenocare i.e., Stenocare and Columbus go up and down completely randomly.
Pair Corralation between Stenocare and Columbus
Assuming the 90 days trading horizon Stenocare AS is expected to generate 8.48 times more return on investment than Columbus. However, Stenocare is 8.48 times more volatile than Columbus AS. It trades about 0.13 of its potential returns per unit of risk. Columbus AS is currently generating about -0.01 per unit of risk. If you would invest 157.00 in Stenocare AS on August 29, 2024 and sell it today you would earn a total of 41.00 from holding Stenocare AS or generate 26.11% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Stenocare AS vs. Columbus AS
Performance |
| Timeline |
| Stenocare AS |
| Columbus AS |
Stenocare and Columbus Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Stenocare and Columbus
The main advantage of trading using opposite Stenocare and Columbus positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Stenocare position performs unexpectedly, Columbus 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 Columbus will offset losses from the drop in Columbus' long position.| Stenocare vs. Sparinvest INDEX Globale | Stenocare vs. Bavarian Nordic | Stenocare vs. Investeringsselskabet Luxor AS | Stenocare vs. cBrain AS |
| Columbus vs. cBrain AS | Columbus vs. FOM Technologies AS | Columbus vs. Penneo AS | Columbus vs. Dataproces Group 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 Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.
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