Correlation Between Transtema Group and Cantargia
Can any of the company-specific risk be diversified away by investing in both Transtema Group and Cantargia 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 Transtema Group and Cantargia into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Transtema Group AB and Cantargia AB, you can compare the effects of market volatilities on Transtema Group and Cantargia 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 Transtema Group with a short position of Cantargia. Check out your portfolio center. Please also check ongoing floating volatility patterns of Transtema Group and Cantargia.
Diversification Opportunities for Transtema Group and Cantargia
-0.36 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Transtema and Cantargia is -0.36. Overlapping area represents the amount of risk that can be diversified away by holding Transtema Group AB and Cantargia AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cantargia AB and Transtema Group 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 Transtema Group AB are associated (or correlated) with Cantargia. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cantargia AB has no effect on the direction of Transtema Group i.e., Transtema Group and Cantargia go up and down completely randomly.
Pair Corralation between Transtema Group and Cantargia
Assuming the 90 days trading horizon Transtema Group AB is expected to generate 0.57 times more return on investment than Cantargia. However, Transtema Group AB is 1.75 times less risky than Cantargia. It trades about 0.05 of its potential returns per unit of risk. Cantargia AB is currently generating about -0.13 per unit of risk. If you would invest 1,342 in Transtema Group AB on August 29, 2024 and sell it today you would earn a total of 196.00 from holding Transtema Group AB or generate 14.61% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 99.22% |
| Values | Daily Returns |
Transtema Group AB vs. Cantargia AB
Performance |
| Timeline |
| Transtema Group AB |
| Cantargia AB |
Transtema Group and Cantargia Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Transtema Group and Cantargia
The main advantage of trading using opposite Transtema Group and Cantargia positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Transtema Group position performs unexpectedly, Cantargia 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 Cantargia will offset losses from the drop in Cantargia's long position.| Transtema Group vs. AstraZeneca PLC | Transtema Group vs. Investor AB ser | Transtema Group vs. Investor AB ser | Transtema Group vs. Atlas Copco AB |
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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.
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