Correlation Between 4C Group and Sileon AB

Can any of the company-specific risk be diversified away by investing in both 4C Group and Sileon AB 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 4C Group and Sileon AB into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between 4C Group AB and Sileon AB, you can compare the effects of market volatilities on 4C Group and Sileon AB 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 4C Group with a short position of Sileon AB. Check out your portfolio center. Please also check ongoing floating volatility patterns of 4C Group and Sileon AB.

Diversification Opportunities for 4C Group and Sileon AB

0.85

Correlation Coefficient

4C Group  Sileon AB

Very poor diversification

The 3 months correlation between 4C Group and Sileon is 0.85. Overlapping area represents the amount of risk that can be diversified away by holding 4C Group AB and Sileon AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sileon AB and 4C 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 4C Group AB are associated (or correlated) with Sileon AB. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sileon AB has no effect on the direction of 4C Group i.e., 4C Group and Sileon AB go up and down completely randomly.

Pair Corralation between 4C Group and Sileon AB

Assuming the 90 days horizon 4C Group AB is expected to generate 0.53 times more return on investment than Sileon AB. However, 4C Group AB is 1.9 times less risky than Sileon AB. It trades about -0.16 of its potential returns per unit of risk. Sileon AB is currently generating about -0.24 per unit of risk. If you would invest  1,570  in 4C Group AB on September 21, 2024 and sell it today you would lose (480.00) from holding 4C Group AB or give up 30.57% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Strong
Accuracy	98.44%
Values	Daily Returns

4C Group AB  vs.  Sileon AB

4C Group AB

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days 4C Group AB has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of weak performance in the last few months, the Stock's basic indicators remain comparatively stable which may send shares a bit higher in January 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Sileon AB

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Sileon AB has generated negative risk-adjusted returns adding no value to investors with long positions. Despite uncertain performance in the last few months, the Stock's essential indicators remain somewhat strong which may send shares a bit higher in January 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Pair Trading with 4C Group and Sileon AB

The main advantage of trading using opposite 4C Group and Sileon AB positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if 4C Group position performs unexpectedly, Sileon AB 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 Sileon AB will offset losses from the drop in Sileon AB's long position.

The idea behind 4C Group AB and Sileon AB pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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.